Chocolate, Inc., uses rate of return on investment (ROI) as a basis for determining the annual bonus
Question:
Chocolate, Inc., uses rate of return on investment (ROI) as a basis for determining the annual bonus of divisional managers. The firm allocates central corporate expenses to the divisions based on total sales. The calculation of ROI for 2000 for two of its divisions follows:
Indicate several factors that, if present, would bias the ROI measure as Chocolate, Inc., has calculated it and lead to possible inequities in determining the annualbonus.
Transcribed Image Text:
Light Chocolate Division Dark Chocolate Division Contribution to Central Corpoate Expenses $100,000 (10,000) g90,000 $600,000 15 Percent 500,000 25,000) S 475,000 $4,750,000 10 Percent and Operating Profit. Divisional Operating Profit. Divisional Investment (assets) ROI
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 53% (13 reviews)
1 Some of the standard cost variances may be noncontrollable by the divisional manager For example if the company maintains a centralized purchasing d...View the full answer
Answered By
Ashington Waweru
I am a lecturer, research writer and also a qualified financial analyst and accountant. I am qualified and articulate in many disciplines including English, Accounting, Finance, Quantitative spreadsheet analysis, Economics, and Statistics. I am an expert with sixteen years of experience in online industry-related work. I have a master's in business administration and a bachelor’s degree in education, accounting, and economics options.
I am a writer and proofreading expert with sixteen years of experience in online writing, proofreading, and text editing. I have vast knowledge and experience in writing techniques and styles such as APA, ASA, MLA, Chicago, Turabian, IEEE, and many others.
I am also an online blogger and research writer with sixteen years of writing and proofreading articles and reports. I have written many scripts and articles for blogs, and I also specialize in search engine
I have sixteen years of experience in Excel data entry, Excel data analysis, R-studio quantitative analysis, SPSS quantitative analysis, research writing, and proofreading articles and reports. I will deliver the highest quality online and offline Excel, R, SPSS, and other spreadsheet solutions within your operational deadlines. I have also compiled many original Excel quantitative and text spreadsheets which solve client’s problems in my research writing career.
I have extensive enterprise resource planning accounting, financial modeling, financial reporting, and company analysis: customer relationship management, enterprise resource planning, financial accounting projects, and corporate finance.
I am articulate in psychology, engineering, nursing, counseling, project management, accounting, finance, quantitative spreadsheet analysis, statistical and economic analysis, among many other industry fields and academic disciplines. I work to solve problems and provide accurate and credible solutions and research reports in all industries in the global economy.
I have taught and conducted masters and Ph.D. thesis research for specialists in Quantitative finance, Financial Accounting, Actuarial science, Macroeconomics, Microeconomics, Risk Management, Managerial Economics, Engineering Economics, Financial economics, Taxation and many other disciplines including water engineering, psychology, e-commerce, mechanical engineering, leadership and many others.
I have developed many courses on online websites like Teachable and Thinkific. I also developed an accounting reporting automation software project for Utafiti sacco located at ILRI Uthiru Kenya when I was working there in year 2001.
I am a mature, self-motivated worker who delivers high-quality, on-time reports which solve client’s problems accurately.
I have written many academic and professional industry research papers and tutored many clients from college to university undergraduate, master's and Ph.D. students, and corporate professionals. I anticipate your hiring me.
I know I will deliver the highest quality work you will find anywhere to award me your project work. Please note that I am looking for a long-term work relationship with you. I look forward to you delivering the best service to you.
3.00+
2+ Reviews
10+ Question Solved
Related Book For
Managerial Accounting An Introduction to Concepts Methods and Uses
ISBN: 978-0324639766
10th Edition
Authors: Michael W. Maher, Clyde P. Stickney, Roman L. Weil
Question Posted:
Students also viewed these Managerial Accounting questions
-
'I know headquarters wants us to add that new product line, said Dell Havasi, manager of Billings Companys Office Products Division. But I want to see the numbers before I make any move. Our...
-
4. 5. 6. How does enzyme function change with temperature? Why is the curve relating enzyme function to temperature asymmetrical? What is the mechanism by which temperature changes the rate of enzyme...
-
The rates of return on investment for Fosina Co.s three divisions, East, Central, and West, are 26%, 20%, and 15%, respectively. In expanding operations, which of Fosina Co.s divisions should be...
-
Find the extreme values of (x, y) = x 2 + 2y 2 subject to the constraint g(x, y) = 4x 6y = 25. (a) Show that the Lagrange equations yield 2x = 42, 4y = -62. (b) Show that if x = 0 or y = 0, then the...
-
What impact does the imposition of a tariff normally have on a nation's terms of trade and volume of trade?
-
Staples, Inc., is a leading office products distributor, with retail stores in the United States, Canada, Asia, Europe, and South America. The following financial statement data were adopted from...
-
What are the final two steps a researcher should do after presenting the research findings to the decision makers?
-
Match the qualitative characteristics below with the following statements. 1. Relevance 2. Faithful representation 3. Predictive value 4. Confirmatory value 5. Comparability 6. Completeness 7....
-
For the past year, a firm had sales of $41,987, interest expense of $3,232, cost of goods sold of $16,500, selling and administrative expense of $11,000, and depreciation of $6,200. If the tax rate...
-
A new furnace for your small factory will cost $27,000 a year to install and will require ongoing maintenance expenditures of $1,500 a year. But it is far more fuel- efficient than your old furnace...
-
During the current year International Business Companys Asian Division incurred differential production costs of $6 million for parts that are transferred to its European Division. Asian Division has...
-
The Safety Alarm Corporation manufactures and sells a patented electronic device for detecting burglaries. The firm uses return on investment as a measure for the control of operations for each of...
-
Cash Flow Hedge on January 2, 2010, Parton Company issues a 5-year, $10,000,000 note at LIBOR, with interest paid annually. The variable rate is reset at the end of each year. The LIBOR rate for the...
-
Consider the value in 3.85 years of a 3-year annuity, with the first $1,000 payment being made one year from today. What is the future value if the APY is 10%?
-
A critical review of a zero-based budget and its use in the public sector. Review should include but not be limited to addressing some of the following attributes of a zero-based budget: Strengths...
-
In your reflection post, address the following issues: Identify a communication principle contained within this verse. Provide an example of this principle in action in your own life or in society .
-
An investor received an e-mail from their Stock Broker informing them that they needed to deposit funds to their account, as a result of a recent decline in stock price, and if they don't deposit the...
-
If you were born in or after 1960, you cannot age collect "full" Social Security retirement benefits until age 67 but many begin collecting as early as age 62. If you wait to collect Social Security...
-
Which cost components are included in total delivered cost (TDC)?
-
United Business Forms capital structure is as follows: Debt ............................................ 35% Preferred stock ........................... 15 Common equity .......................... 50...
-
Write each sentence in Problems 2946 as a proportion, and then solve to answer the question. 12 is 33 1/3 % of what number?
-
CompuFurn, Inc. manufactures furniture for computer work stations. CompuFurn uses a job- order costing system and employs absorption costing. CompuFurns work-in-process inventory on November 30...
-
FiberCom, Inc., a manufacturer of fiber optic communications equipment, uses a job order costing system. Since the production process is heavily automated, manufacturing overhead is applied on the...
-
Briefly explain how a traditional, volume-based product-costing system operates.
-
Prob. 1(a). Consider a stock currently trading at $40.25. For a strike price of $38, you want to price both a call and put option that matures 90 days from now. The volatility of the stock (2) is...
-
Wildhorse sells a snowboard, WhiteOut, that is popular with snowboard enthusiasts. Presented below is information relating to Wildhorse's purchases of WhiteOut snowboards during September. During the...
-
The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a perpetual inventory system. It categorizes the following accounts as selling expenses:...
Study smarter with the SolutionInn App