Question: Case #3 White Inc. operates three separate manufacturing divisions that operate autonomously. For 2022, the company has a desired rate of return of 13%. Information
Case #3 White Inc. operates three separate manufacturing divisions that operate autonomously. For 2022, the company has a desired rate of return of 13%. Information for each division for 2022 was as follows: Division A Division B Division C Sales $12,250,000 $8,750,000 $17,500,000 Contribution margin 2,975,000 2,520,000 6,125,000 Operating income 2,625,000 1,575,000 3,883,600 Investment base 17,500,000 15,750,000 26,600,000 Reguired: (A) What is the ROI for each division? Based on each division's ROI, rank them in order of profitability. (B) What is the residual income for each division? Based on each division's residual income, rank them in order of profitability. (C) Reviewing your calculations in (A) and (B), which division had the strongest performance for 2020 and why? (D) A new investment is available which will generate operating income of $55,000 with an investment of $500,000. Which divisionls) would be interested in pursuing this investment if divisions are evaluated based on ROI? Which divisionls) would be| interested in pursuing this investment if divisions are evaluated based on RI
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