1. Cabell Products is a division of a major...
Cabell Products is a division of a major corporation. Last year the division had total sales of $27,220,000, net operating income of $2,874,320, and average operating assets of $7,900,000. The company's minimum required rate of return is 12%.
The division's turnover is closest to:
Multiple Choice
9.47
3.45
0.36
3.03
2.
Cabell Products is a division of a...
Cabell Products is a division of a major corporation. Last year the division had total sales of $12,270,000, net operating income of $834,360, and average operating assets of $3,190,200. The company's minimum required rate of return is 12%.
The division's return on investment (ROI) is closest to:
Multiple Choice
6.8%
26.2%
56.7%
26.0%
3.
The Consumer Products Division of...
The Consumer Products Division of Goich Corporation had average operating assets of $950,000 and net operating income of $96,600 in May. The minimum required rate of return for performance evaluation purposes is 10%.
What was the Consumer Products Division's residual income in May?
Multiple Choice
$(1,600)
$9,660
$1,600
$(9,660)
4.
Wallen Corporation is considering eliminating ...
Wallen Corporation is considering eliminating a department that has an annual contribution margin of $80,000 and $160,000 in annual fixed costs. Of the fixed costs, $90,000 cannot be avoided. The annual financial advantage (disadvantage) for the company of eliminating this department would be:
Multiple Choice
$10,000
($10,000)
$80,000
($80,000)
5.
The following information relates ...
The following information relates to next year's projected operating results of the Children's Division of Grunge Clothing Corporation:
| Contribution margin | $ | 200,000 | ||
| Fixed expenses | 500,000 | |||
| Net operating loss | $ | (300,000 | ) | |
If the Children's Division is eliminated, $170,000 of the above fixed expenses could be avoided. The annual financial advantage (disadvantage) for the company of eliminating this division should be:
Multiple Choice
($300,000)
$30,000
($30,000)
$300,000
1. Turnover = Sales /Average operating assets
= 27,220,000/7,900,000
= 3.45
Option B
2.
Margin = Net operating income /sales
= 834,360/12,270,000 = 6.8%
Turnover = Sales /Average operating assets
=12,270,000/3,190,200 = 3.85
ROI = margin *turnover = 6.8*3.85 =26.2%
Option B
3.
Residual income = Net operating income - required return
= 96,600 - (950,000*10%)
= 1,600
Option C
1. Cabell Products is a division of a major... Cabell Products is a division of a...