The managing partner of the law firm Sewell, Bagan, and Clark, LLP, makes asset acquisition and disposal
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 Vanessa Smiths 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 branchs return on investment and residual income. (Round percentages to two decimal places.)
b. Using the ROI and residual income, evaluate Vanessa Smiths performance as branchmanager.
Step by Step Answer:
Principles of Accounting
ISBN: 978-1133626985
12th edition
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson