Bobbie Howell, the managing partner of the law firm Howell, Bagan, and Clark, LLP, makes asset acquisition
Question:
Required
1. Assume that the City Branch is a profit center. Prepare a performance report that includes a flexible budget. Determine the variances between actual results, the flexible budget, and the master budget.
2. Evaluate Victoria Smith's performance as manager of the City Branch.
3. Assume that the branch managers are assigned responsibility for capital expenditures and that the branches are thus investment centers. City Branch is expected to generate a desired ROI of at least 30 percent on average invested assets of $40,000.
a. Compute the branch's return on investment and residual income.
b. Manager Insight: Using the ROI and residual income, evaluate Victoria Smith's performance as branch manager.
Step by Step Answer:
Principles of Accounting
ISBN: 978-0618736614
10th edition
Authors: Belverd Needles, Marian Powers, Susan Crosson