Part 1: Calculating Short-Term Measurements The following annual information is available for Lakewood Industries, an investment center:

a. Calculate ROI (return on investment). Base your calculations on segment margin and average assets. (Round percentage to one decimal point.)

b. Calculate segment profit margin. (Round percentage to one decimal point.)

c. Calculate asset turnover. Base your calculations on average assets. (Round amount to two decimal points.)

d. Using (b) and (c), prove your answer to (a). (Round percentage to one decimal point.)

e. Compute the annual \(\mathrm{Rl}\) (residual income). Base your calculations on segment margin and average assets.

f. Calculate the EVA (economic value added). Base your calculations on after tax-segment margin.
g. Indicate whether the measures computed in (a), (b), (c), (e), and ( \(f\) ) are lagging indicators or leading indicators.

Part 2: Identifying Short-Term Measurements by Responsibility Center Select the most comprehensive performance measurement 1 through 4, appropriate for each responsibility center, a through \(d\).

Transcribed Image Text:

Total assets, beginning of year. $190,000 Variable operating expenses Total assets, end of year.... 180,000 Direct fixed costs Average fair value of invested capital for Allocated fixed costs. the year. 238,000 Sales.. 453,000 $225,000 160,000 17,000