Great Falls Corporation has three operating divisions organized along product lines: the Recreational Products Division (RPD), the

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Great Falls Corporation has three operating divisions organized along product lines: the Recreational Products Division (RPD), the Household Products Division (HPD), and the Commercial Tools Division (CTD). The balance sheet at the beginning of the year showed total corporate assets of $66,000,000, and the year-end balance sheet showed total assets of $70,000,000, with $5,000,000 attributable to corporate headquarters at both the beginning and end of the year. The remainder of the corporation's assets were used by the three divisions in the following proportions: 25%, 40% and 35% by RPD, HPD, and CTD, respectively. Corporate assets and expenses are not allocated to the division when their respective performances are evaluated, and average assets are used when divisional return on capital employed is computed. The condensed income statement for the current year is as follows:
Great Falls Corporation has three operating divisions organized along product

Required:
For each division and for the corporation as a whole, compute each of the following:
(1) Capital-employed turnover rate
(2) Percentage of profit to sales
(3) Rate of return on capital employed

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Cost Accounting

ISBN: 978-0759338098

14th edition

Authors: William K. Carter

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