Neelon Corporation has two divisions: Southern Division and Northern Division. The following data are for the most recent operating period: Sales Variable expenses Traceable fixed expenses Common fixed expense Total Company Southern Division $ 418,000 $ 193,000 $ 130,880 $ 79,130 $ 186,000 $ 77,000 $ 79,420 $ 36,670 Northern Division $ 225,000 $ 51,750 $ 109,000 $ 42,750 The common fixed expenses have been allocated to the divisions on the basis of sales. What is the company's overall net operating income if it operates at the break-even points for its two divisions? Multiple Choice $(79,420) $21,700 $(265,420) $0
Q: Pharoah Company is a very profitable small business. It has not, however, given much consideration…
A: To prepare a correct bank reconciliation, we need to compare the bank statement with the company's…
Q: Scottish Souvenirs Company has a Sewing Division that does sewing work of various types. The…
A: Scottish Souvenirs Company Transfer Pricing AnalysisA) Transfer Pricing Range for Increased…
Q: A company began 2024 with 27,000 units of inventory on hand. The cost of each unit was $5.00. During…
A: FIFO method is one of the methods of inventory valuation in which it is assumed that old purchases…
Q: On January 2, 2023, Precious & Gracious Company purchased marketable equity securities as investment…
A: The provided questions pertain to accounting for investments in securities and the consequences of…
Q: Direct labor: 4,200 hours @ $20 per hr. Production manager salary: $35,000 Factory rent:…
A: Absorption costing:Under absorption costing, the fixed overhead cost is allocated to the each unit…
Q: vero S.A. of Sao Paulo, Brazil, is organized into two divisions. The company's contribution format…
A: Income statement:The income statement is the statement or the record that is prepared by the company…
Q: Exercise 4-19 (Static) Wholly Owned Subsidiary with a Differential LO 4-3 Stick Corporation is a…
A: Investment in Associates and Joint venture and SubsidiaryEquity Accounting method - This method is…
Q: Following are preacquisition financial balances for Padre Company and Sol Company as of December 31.…
A: Consolidated financial statements are a type of financial report that compiles the financial data…
Q: Crow Company purchased some of the machinery of Hare Incorporated, a bankrupt competitor, at a…
A: Liquidation is the process of bringing a business to an end and distributing its assets to…
Q: Identify the principle of internal control to each of the following cases. 1. Cash is locked in a…
A: Cash is locked in a safe overnight. - Safeguarding of Assets This control measure protects the…
Q: Dina Fritz Corporation provided the following information on Shareholders Equity on December 31,…
A: Journal entry records the accounting transactions of a business in a journal book. All the business…
Q: uisition showed that goodwill of P2,500,000 was acquired. The net income and dividend o s follows:…
A: Consolidations:Consolidations refer to the method or financial strategy that empowers a company to…
Q: Sheffield Corporation is a regional company which is an SEC registrant. The corporation's securities…
A: A debenture is a type of debt security that is issued by both corporations and governments to secure…
Q: Required information [The following information applies to the questions displayed below.] The…
A: Unadjusted Trial Balance is the trial balance before making adjustments. When a company enters all…
Q: 31,000 17,000 Net sales $ Cost of goods sold $ Selling and administrative Interest income 330…
A: A multiple-step income statement is prepared by dividing the revenue and costs into operating and…
Q: Enter the missing dollar amounts for the income statement for each of the following independent…
A: A financial document called an income statement provides a summary of a business's financial results…
Q: When the components of income tax expense are disclosed on the income statement or footnotes, what…
A: Deferred Tax:Deferred Tax Liability (DTL) or Deferred Tax Asset (DTA) forms an important part of…
Q: NINE Company reported a pre-tax financial income of $8,584,950 for the year ended December 31, 2021.…
A: Taxable income is the income earned by an individual, firm or company that is eligible to pay taxes…
Q: The statement of income of Pina Colada Corporation is presented here. PINA COLADA CORPORATION…
A: CASH FLOW STATEMENTCash flow statement Provides additional information to user of financial…
Q: The partnership of Bauer, Ohtani, and Souza has elected to cease all operations and liquidate its…
A: partnership :A partnership refers to a kind of business structure in which two or more people agree…
Q: The following are the components in determining cost of goods sold. Determine the missing amounts.…
A: Cost of goods sold (COGS) - Depicts the cost of the goods that are sold by the company. Such cost…
Q: Yosko Company expects to produce 2,070 units in January that will require 4,140 hours of direct…
A: MANUFACTURING OH BUDGETManufacturing OH Budget is the Management Estimation of Manufacturing OH Cost…
Q: Determine the tax liability, marginal tax rate, and average tax rate in each of the following cases.…
A: Income tax liability is the amount of tax that an individual or entity owes to the government based…
Q: REI sells snowboards. Assume the following information relates to REI's purchases of snowboards…
A: FIFO (First In First Out) is the inventory valuation method that determines the cost of goods sold…
Q: Select financial statement data for two recent years for Davenport Company are as follows: Line…
A: The objective of the question is to calculate the fixed asset turnover ratio for the years 20Y4 and…
Q: Sierra Company manufactures soccer balls in two sequential processes: Cutting and Stitching. All…
A: Journal entriesThe process of recording the day-to-day transactions of the company in the books is…
Q: Limpopo Limited plans to manufacture a new energy efficient outdoor light and the following…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Scholastic Furniture, Incorporated, manufactures a variety of desks, chairs, tables, and shelf units…
A: Sales budget is a plan that estimates a company's total revenue for a specific time period.…
Q: Assume that on January 1, 2020, Elmer's Restaurants sells a computer system to Oriole Finance Co.…
A: An agreement in which one party gives another party the use of real estate or land in exchange for…
Q: six-month was the simple annual interest rate 20. You deposit $2000 into a savings account. The…
A: The objective of the question is to find out how long it will take to earn $120 in interest with a…
Q: Thornton Cameras, Incorporated manufactures two models of cameras. Model ZM has a zoom lens; Model…
A: Overhead is allocated on the basis of the activity rate with respect to the activity. There are two…
Q: The records of Oriole's Boutique report the following data for the month of April. Sales revenue…
A: Conventional Retail Method: Instead of using things at a physical location, the traditional retail…
Q: Escargot Inc. is a 5-star restaurant in Cincinnati. The restaurant sells 500 gift cards during…
A: Revenue Recognition means the recording of revenues of an entity in its books. It is an accrual…
Q: On January 1, 2019, Monica Company acquired 80 percent of Young Company's outstanding common stock…
A: Under the equity method, the investor initially records the investment at cost and subsequently…
Q: Required information [The following information applies to the questions displayed below.] Carlberg…
A: Direct material cost is the cost of raw material produced or purchased to produce the final…
Q: 16. Using the expanded accounting equation, solve for the missing amount. Assets Liabilities 71,288…
A: As per dual concept of accounting, every transaction has dual impact on the books of accounts.The…
Q: For its first year of operations, Tringali Corporation's reconciliation of pretax accounting income…
A: Income tax expense refers to the amount of tax that a company expects to pay based on its taxable…
Q: st and leave the corresponding number entry box blank. Enter account decreases and cash outflows as…
A: Financial statement:The financial statement is the statement or the record that is prepared by the…
Q: A business operated at 100% of capacity during its first month and incurred the following costs:…
A: MARGINAL COSTING INCOME STATEMENTMarginal Costing Income Statement is One of the Important Cost…
Q: Hulme Company operates a small manufacturing facility as a supplement to its regular service…
A: Depreciation Expenses are the expenses incurred on the wear and tear of the fixed assets. This is…
Q: Crane Shop Ltd. is a mid-sized public company that had been in operation for many years. On December…
A: Stockholders’ equity refers to the ownership interest in the business. It is the claim of the owners…
Q: ! Required information [The following information applies to the questions displayed below.) During…
A: The depreciation is provided on tangible assets like buildings, machinery equipment, etc to allocate…
Q: Current Attempt in Progress Joe Dumars Company has outstanding 40,000 shares of $5 par common stock…
A: Treasury shareThe company issues shares to the public to raise capital and funds. When a company…
Q: The equity section from the December 31, 2020 balance sheet of Kentucky Corporation appeared as…
A: Statement of change in equity -The statement of changes in equity is a summary of the equity…
Q: Equipment was acquired at the beginning of the year at a cost of $34,750. The equipment was…
A: The book value of an asset refers to the difference between the original cost of an asset and the…
Q: Windsor Company was formed on July 1, 2023. It was authorized to issue 314,000 shares of $10 par…
A: To prepare the stockholders' equity section of the balance sheet for Windsor Company as of June 30,…
Q: nethod at the end of each period, as if it uses a periodic inventory system. Assume its accounting…
A: The periodic inventory system is used for valuing the inventory. Under this method the inventory is…
Q: Problem 14-4A (Algo) Straight-Line: Amortization of bond discount LO P2 [The following information…
A: Bonds are the securities which are issued by the entity in the market for raising funds. These are…
Q: 1. What do you think is automation? 2. Why is automation needed? 3. What do you think are the…
A: Automation refers to the use of technology, machinery, or systems to perform tasks with minimal…
Q: As a result of its annual inventory count, Brambl value at December 31, 2022, and December 31, Cost…
A: Periodic inventory requires a company to do a physical inventory count at regular periods, often at…
Step by step
Solved in 3 steps with 1 images
- Macon Mills is a division of Bolin Products. Inc. During the most recent year, Macon had a net income of $40 million. Included in the income was interest expense of $2,800,000. The companys tax rate was 40%. Total assets were $470 million, current liabilities were $104,000,000, and $72,000,000 of the current liabilities are noninterest bearing. What are the invested capital and ROI for Macon?The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department allocations): The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that 143,750,000 of assets have been invested in the Consumer Products Division. b. If expenses could be reduced by 3,450,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division?Corrections to service department charges Panda Airlines Inc. has two divisions organized as profit centers, the Passenger Division and the Cargo Division. The following divisional income statements were prepared The service department charge rate for the service department costs was based on revenues. The following additional information is available a.Does the operating income for the two divisions accurately measure performance? b.Using service charge rates for service department charges, correct the divisional income statements.
- Service department charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of 64,560, and the Purchasing Department had expenses of 40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: A. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. B. Using the cost driver information in (A), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. C. Why does the Residential Division have a larger support department allocation than the other two divisions, even though its sales are lower?Profit center responsibility reporting On-Demand Sports Co. operates two divisions—the Action Sports Division and the Team Sports Division. The following income and expense accounts were provided as of November 30. 20Y1, the end of the current fiscal year, after all adjustments, including those for inventories, were recorded The bases to be used in allocating expenses, together with other essential information, are as follows a.Advertising expense—incurred al headquarters, charged back to divisions on the basis of usage: Action Sports Division. $1,200,000; Team Sports Division, $1,800,000. b. Transportation expense—charged hack lo divisions at a charge rale of $18.50 per bill of lading: Action Sports Division, 14.000 bills of lading; Team Sports Division. 21.400 bills of lading. C. Accounts receivable collection expense—incurred al headquarters, charged back to divisions at a charge rate of $9-00 per invoice: Action Sports Division. 32.000 sales invoices; Team Sports Division, 12.500 sales invoices. d. Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Action Sports Division. 120.000 square feet; Team Sports Division. 80.000 square feet. Prepare divisional income statements with two column headings: Action Sports Division and Team Sports Division. Provide supporting schedules for determining service department charges.Xenold, Inc., manufactures and sells cooktops and ovens through three divisions: Home, Restaurant, and Specialty. Each division is evaluated as a profit center. Data for each division for last year are as follows (numbers in thousands): The income tax rate for Xenold, Inc., is 40 percent. Xenold, Inc., has two sources of financing: bonds paying 5 percent interest, which account for 25 percent of total investment, and equity accounting for the remaining 75 percent of total investment. Xenold, Inc., has been in business for over 15 years and is considered a relatively stable stock, despite its link to the cyclical construction industry. As a result, Xenold stock has an opportunity cost of 5 percent over the 4 percent long-term government bond rate. Xenolds total capital employed is 5.04 million (2,600,000 for the Home Division, 1,700,000 for the Restaurant Division, and the remainder for the Specialty Division). Required: 1. Prepare a segmented income statement for Xenold, Inc., for last year. 2. Calculate Xenolds weighted average cost of capital. (Round to four significant digits.) 3. Calculate EVA for each division and for Xenold, Inc. 4. Comment on the performance of each of the divisions.
- Last Resort Industries Inc. is a privately held diversified company with five separate divisions organized as investment centers. A condensed income statement for the Specialty Products Division for the past year, assuming no support department allocations, along with asset information is as follows: The manager of the Specialty Products Division was recently presented with the opportunity to add an additional product line, which would require invested assets of 14,400,000. A projected income statement for the new product line is as follows: The Specialty Products Division currently has 27,000,000 in invested assets, and Last Resort Industries Inc.s overall return on investment, including all divisions, is 10%. Each division manager is evaluated on the basis of divisional return on investment. A bonus is paid, in 8,000 increments, for each whole percentage point that the divisions return on investment exceeds the company average. The president is concerned that the manager of the Specialty Products Division rejected the addition of the new product line, even though all estimates indicated that the product line would be profitable and would increase overall company income. You have been asked to analyze the possible reasons the Specialty Products Division manager rejected the new product line. a. Determine the return on investment for the Specialty Products Division for the past year. b. Determine the Specialty Products Division managers bonus for the past year. c. Determine the estimated return on investment for the new product line. Round percentages to one decimal place and the investment turnover to two decimal places. d. Why might the manager of the Specialty Products Division decide to reject the new product line? Support your answer by determining the projected return on investment for 20Y6, assuming that the new product line was launched in the Specialty Products Division and 20Y6 actual operating results were similar to those of 20Y5. e. Suggest an alternative performance measure for motivating division managers to accept new investment opportunities that would increase the overall company income and return on investment.During the current year. Plainfield Manufacturing earned income of $845,000 from total sales of $9,350,000 and average capital assets of $13,500,000. What is the sales margin?The following information was taken from the segmented income statement of Maniraguha plc, and the company's three divisions: Maniraguha, Incorporated eastern Division western Division central Division Revenues $ 1,120,000 $ 320,000 $ 355,000 $ 445,000 Variable operating expenses 626,000 176,000 195,000 255,000 Controllable fixed expenses 255,000 80,000 90,000 85,000 Noncontrollable fixed expenses 105,000 30,000 35,000 40,000 In addition, the company incurred common fixed costs of $22,500. Assume that the eastern division increases its promotion expense, a controllable fixed cost, by $23,500. As a result, revenues increased by $64,000. If variable expenses are tied directly to revenues, what is the new Eastern division segment profit margin?
- Dacker Products is a division of a major corporation. The following data are for the most recent year of operations: Sales$ 37,880,000Net operating income$ 3,508,960Average operating assets$ 9,400,000The company's minimum required rate of return14% The division's residual income is closest to:Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for the most recent operating period: Total Company Blue Division Gold Division Sales $ 522,000 $ 391,000 $ 131,000 Variable expenses 160,670 89,930 70,740 Contribution margin 361,330 301,070 60,260 Traceable fixed expenses 286,000 239,000 47,000 Segment margin 75,330 $ 62,070 $ 13,260 Common fixed expenses 73,080 Net operating income $ 2,250 The Gold Division's break-even sales is closest to: $102,174 $261,043 $142,043 $518,750