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Exam 12: Segment Reporting, Decentralization, and the Balanced Scorecard

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Question 21

Multiple Choice

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Deano Products is a division of a major corporation. The following data are for the last year of operations: -The division's residual income is closest to:

A) $591,480
B) $(128,520)
C) $(1,698,120)
D) $1,311,480

E) A) and B)
F) B) and D)

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Question 22

Multiple Choice

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A company's average operating assets are $220,000 and its net operating income is $44,000. The company invested in a new project, increasing average assets to $250,000 and increasing its net operating income to $49,550. What is the project's residual income if the required rate of return is 20%?

A) ($450)
B) $450
C) $600
D) ($600)

E) A) and B)
F) None of the above

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Question 23

Multiple Choice

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Ceder Products is a division of a major corporation. Last year the division had total sales of $21,520,000, net operating income of $538,000, and average operating assets of $8,000,000. The company's minimum required rate of return is 18%. -The division's residual income is closest to:

Kulp Corporation has two major business segments-East and West. In July, the East business segment had sales revenues of $900,000, variable expenses of $441,000, and traceable fixed expenses of $171,000. During the same month, the West business segment had sales revenues of $450,000, variable expenses of $234,000, and traceable fixed expenses of $45,000. The common fixed expenses totaled $321,000 and were allocated as follows: $180,000 to the East business segment and $141,000 to the West business segment. -A properly constructed segmented income statement in a contribution format would show that the segment margin of the East business segment is:

Which of the following will not result in an increase in return on investment (ROI) , assuming other factors remain the same?

Last year the House of Orange had sales of $826,650, net operating income of $81,000, and operating assets of $84,000 at the beginning of the year and $90,000 at the end of the year. What was the company's turnover rounded to the nearest tenth?

The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow: -If Axle sells 15,000 units per year, the residual income should be:

The Holmes Division recorded operating data as follows for the past year: -For the past year, the margin was:

Data for December concerning Dinnocenzo Corporation's two major business segments-Fibers and Feedstocks-appear below: Common fixed expenses totaled $314,000 and were allocated as follows: $129,000 to the Fibers business segment and $185,000 to the Feedstocks business segment. Required: Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts.

Harstin Corporation has provided the following data: -The margin for the past year was:

Financial data for Beaker Company for last year appear below: The company paid dividends of $2,100 last year. The "Investment in Cedar Company" on the statement of financial position represents an investment in the stock of another company. Required: a. Compute the company's margin, turnover, and return on investment for last year. b. The Board of Directors of Beaker Company has set a minimum required return of 20%. What was the company's residual income last year?

Return on investment (ROI) is equal to the margin multiplied by:

The Holmes Division recorded operating data as follows for the past year: -For the past year, the return on investment was:

The Holmes Division recorded operating data as follows for the past year: -For the past year, the turnover was:

Deano Products is a division of a major corporation. The following data are for the last year of operations: -The division's turnover is closest to:

Harstin Corporation has provided the following data: -The minimum required rate of return for the past year was:

The emphasis in the balanced scorecard is on improvement rather than meeting a preset standard.

Return on investment (ROI) may not be fully controllable by a manager because of committed costs.

Ieso Company has two stores: J and K. During November, Ieso Company reported a net operating income of $30,000 and sales of $450,000. The contribution margin in Store J was $100,000, or 40% of sales. The segment margin in Store K was $30,000, or 15% of sales. Traceable fixed expenses are $60,000 in Store J, and $40,000 in Store K. -Ieso Company's total fixed expenses for the year were:

Deano Products is a division of a major corporation. The following data are for the last year of operations: -The division's margin is closest to: