FREE Trial

White Inc. operates three separate manufacturing divisions that operate autonomously. For 2022, the company has a desired rate of...

This problem has been solved!
Do you need an answer to a question different from the above? Ask your question!

Question:

Transcribed Image Text:

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: Sales Contribution margin Operating income Investment base Division A $12,250,000 2,975,000 2,625,000 17,500,000 Division B $8,750,000 2,520,000 1,575,000 15,750,000 Division C $17,500,000 6,125,000 3,883,600 26,600,000 Required: (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 division(s) would be interested in pursuing this investment if divisions are evaluated based on ROI? Which division (s) would bel interested in pursuing this investment if divisions are evaluated based on RI.

Expert Answer:

Answer rating: 100% (QA)

answer A Return on Investment ROI for each division is calculated as follows ROI Operating Income In View the full answer


answer-question
Related Book For  answer-question
Cost Management A Strategic Emphasis

Cost Management A Strategic Emphasis

ISBN: 978-0077733773

7th edition

Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins

See More Books
View Solution
Create a free account to access the answer
Cannot find your solution?
Post a FREE question now and get an answer within minutes. * Average response time.
Posted Date: August 29, 2023 01:55:56
See More Questions

Students also viewed these accounting questions

Q:
List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
A:
Three specific parts of the Case Guide Objectives and Strategy Section that I had the most difficulty understanding are the purpose of the Industry an......
Q:
A bakery with a December 31 st year end purchased new equipment on October 31 st 2000 for $10,000. This was their first equipment purchase. Required: What are the tax consequences if the equipment is...
A:
The tax consequences for the sale of the equipment would be as follows If the equipment is sold for 3 000 the business would realize a capital loss of 7 000 If the equipment is sold for 8 000 the busi......
Q:
Your Company is evaluating the acquisition of a new piece of equipment that has an installed cost of $ 10,000,000. The equipment will add $2,000,000 to earnings before interest and taxes each year...
A:
To calculate the payback period and net present value NPV for each financing option we need to first calculate the annual cash flows for each option W......
Q:
In using the bolt cutter shown, a worker applies two 300-N forces to the handles. Determine the magnitude of the forces exerted by the cutter on the bolt. 300 N 12 mm 24 mm E 24 mm 460 mm 96 mm 300 N...
A:
B y 11 200 0 N Then F......
Q:
The U.S. stock market hit an all-time high in October 1929 before crashing dramatically. Following the market crash, the U.S. entered a prolonged economic downturn dubbed The Great Depression. Using...
A:
It was not until 1943 44 that the U S market re......
Q:
Enter smartcitiescouncil.com. Write a summary of the major concept found there; list the major enablers and the type of available resources.
A:
Major Concepts Urban Innovation Smart cities focus on adopting innovative solutions and technologies to improve the quality of life for residents enha......
Q:
Would you rather work for a company that takes a stakeholder or stockholder approach in its dealings with customers, employees, suppliers, and other constituencies in its network? Explain.
A:
The choice between a stakeholder or stockholder approach in business dealings involves differing philosophies on how a company should prioritize the i......
Q:
Kelly's Collectibles sells nearly half its merchandise on credit. During the past four years, the following data were developed for credit sales and losses from uncollectible accounts: In 2010,...
A:
1 Year Calculations Loss Rate 2006 15 527 205 000 0 076......
Q:
Compare and contrast the three types of tax law sources and give examples of each. 2) What are the basic differences between regulations, revenue rulings, and private letter rulings? 3) How is the...
A:
1 Three types of tax law sources are a Statutory sources These include laws enacted by legislative bodies such as the Internal Revenue Code IRC in the......
Q:
Q1. New Wealth Bank is currently redesigning its performance measurement system. Up until now it has relied heavily on monthly cost variance reports to control the costs in each bank branch, but...
A:
Question 1 1 identify some key performance indicators KPIs for the bank and some key performance drivers KPDs that could be used to manage operations......
Q:
Given the weight of a letter in grams, determine the cost of the postage: up to 30g = 48 up to 50g = 70 up to 100g = 90 past 100g = 100g cost + 18 for each 50g
A:
To determine the cost of postage for a letter based on its weight in grams we can follo......
Q:
Come up with a Python program to analyze donations for a fictional non-profit. Copy the numbers given below into the yearlydonations.txt file. Make sure to save this file in the directory when...
A:
Click to View...
Q:
Kathy Smith has a margin account with a balance of $60,000. Initial margin requirements are 60 percent and Tesla stock is currently selling for $400 per share. Given this information, how many shares...
A:
To determine how many shares of Tesla Kathy can buy using full margin and calculate the rate of retu......
Q:
1. Company A has the following information on its management books: Sales Volume: 5,000 units Price per Unit: $10 Variable Costs per Unit: $3 Fixed Costs per Unit: $7 What is the contribution margin...
A:
Let s calculate various financial metrics for each of the companies based on the provided information 1 Company A Sales Volume 5 000 units Price per U......
Q:
Suppose that the price of stock A is given by f(t) +/2+5 and the price of stock B is given by g(t) = 0.1t3/2+5, where the price is measured in dollars (per share) and t represents time, measured in...
A:
SOLUTION a To determine when the prices of stocks A and B are increasing we need to find the values......
Q:
Read the case study Framing Sweatshops: Nike, Global Production, and the American News Media by Josh Greenberg & Graham Knight and write a paper about it
A:
Nike Inc When in it comes to the sportswear industry Nike Inc happens to occupy one of the largest share markets in the sporting industry For instance......
Q:
Graph the following conic sections, labeling vertices, foci, directrices, and asymptotes (if they exist). Give the eccentricity of the curve. Use a graphing utility to check your work. 10 5 + 2 cos 0
A:
The eccentricity is The vertices a......
Q:
You are provided with the following financial statement information from Nimrod, Inc. for its most recent fiscal year. Statement of Financial Position (Balance Sheet) End of Year (000s) Assets Cash $...
A:
Given Data Statement of Financial Position End of Year 000s Assets Cash 35 Net accounts receivable A R 190 Inventory 190 Other current assets 95 Total current assets 510 Property plant and equipment n......
Q:
VIP-MD is a health maintenance organization (HMO) located in North Carolina. Unlike the traditional fee-for-service model that determines the payment according to the actual services used or costs...
A:
Given Data Enrollment in 2016 Projected Enrollment in 2017 Average Monthly Cost in 2016 Age 1 to 4 45 688 48 977 11 147 872 5 to 14 82 456 84 663 10 059 632 15 to 19 95 873 95 887 8 436 824 20 to 24 6......
Q:
A number of ethical issues arise in the design of management control systems. For example, such issues might arise when an individual's performance relative to budget or standard cost affects the...
A:
1 The IMA Statement of Ethical Professional Practice provides a set of four overarching principles designed to guide member behavior As well there is......
IELTS 17 Academic Student's Book With Answers With Audio With Resource Bank IELTS Practice Tests 1st Edition - ISBN: 1108933815 - Free Book