Question
In: Accounting
Vicon Manufacturing Bhd has reported the following results for last year’s operation: Sales RM30 million Net...
Vicon Manufacturing Bhd has reported the following results for last year’s operation:
|
Sales |
RM30 million |
|
Net operating income |
RM 5 million |
|
Average operating assets |
RM 15 million |
Required:
(a) Compute Vicon Manufacturing Bhd’s margin.
[ 3 marks ]
(b) Compute Vicon Manufacturing Bhd’s turnover.
[ 3 marks ]
(c) Compute the Vicon Manufacturing Bhd’s return on investment.
[ 3 marks ]
(d) Chief Executive Officer of Vicon Manufacturing Bhd has set a minimum required rate of return on average operating assets of 20%, What is the Vicon Manufacturing Bhd’s residual income for the year?
[ 4 marks ]
(e) Explain the relationship between return on investment and residual income.
[ 6 marks ]
(f) Why return on investment and residual income are important for performance measurement in decentralised organisation?
[ 6 marks ]
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Northern Illinois Manufacturing reported the following results from last year’s operations: Sales (1,325,000 units) $ 15,900,000...
Northern Illinois Manufacturing reported the following results
from last year’s operations:
Sales (1,325,000 units)
$ 15,900,000
Variable Expenses:
Direct Materials
1,801,800
Direct Labor
5,450,580
Manufacturing OH
2,053,750
S & A
2,112,000
Total Variable
11,418,130
Contribution Margin
4,481,870
Fixed Expenses
Manufacturing OH
757,700
S & A
1,136,800
Total Fixed
1,894,500
Net Operating Income
$ 2,587,370
Total operating assets at the end of the year are $20,700,000.
The total operating assets at the end...
Westerville Company reported the following results from last year’s operations:
Westerville Company reported the following results from last year’s operations:
Sales
$
1,000,000
Variable expenses
300,000
Contribution margin
700,000
Fixed expenses
500,000
Net operating income
$
200,000
Average operating assets
$
625,000
This year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics:
Sales
$
200,000
Contribution margin ratio
60
% of...
Westerville Company reported the following results from last year’s operations: Sales $ 1,500,000 Variable expenses 500,000...
Westerville Company reported the following results from last
year’s operations:
Sales
$
1,500,000
Variable expenses
500,000
Contribution margin
1,000,000
Fixed expenses
700,000
Net operating income
$
300,000
Average operating assets
$
1,000,000
At the beginning of this year, the company has a $200,000
investment opportunity with the following cost and revenue
characteristics:
Sales
$
300,000
Contribution margin ratio
60
% of sales
Fixed expenses
$
132,000
The company’s minimum required rate of return is 10%.
What is the residual income...
Westerville Company reported the following results from last year’s operations: Sales $ 1,400,000 Variable expenses 720,000...
Westerville Company reported the following results from last
year’s operations:
Sales
$
1,400,000
Variable expenses
720,000
Contribution margin
680,000
Fixed expenses
470,000
Net operating income
$
210,000
Average operating assets
$
875,000
At the beginning of this year, the company has a $350,000
investment opportunity with the following cost and revenue
characteristics:
Sales
$
560,000
Contribution margin ratio
70
% of sales
Fixed expenses
$
336,000
The company’s minimum required rate of return is 15%.
Required
1. What is the...
Westerville Company reported the following results from last year’s operations: Sales $ 1,200,000 Variable expenses 420,000...
Westerville Company reported the following results from last
year’s operations:
Sales
$
1,200,000
Variable expenses
420,000
Contribution margin
780,000
Fixed expenses
600,000
Net operating income
$
180,000
Average operating assets
$
600,000
This year, the company has a $137,500 investment opportunity
with the following cost and revenue characteristics:
Sales
$
220,000
Contribution margin ratio
60
% of sales
Fixed expenses
$
99,000
The company’s minimum required rate of return is
20%.
rev: 04_28_2016_QC_CS-49731
1.
value:
1.00...
Westerville Company reported the following results from last year’s operations: Sales $ 2,300,000 Variable expenses 670,000...
Westerville Company reported the following results from last
year’s operations:
Sales
$
2,300,000
Variable expenses
670,000
Contribution margin
1,630,000
Fixed expenses
1,170,000
Net operating income
$
460,000
Average operating assets
$
1,437,500
At the beginning of this year, the company has a $287,500
investment opportunity with the following cost and revenue
characteristics:
Sales
$
460,000
Contribution margin ratio
50
% of sales
Fixed expenses
$
161,000
The company’s minimum required rate of return is 15%.
6. What is the ROI...
Westerville Company reported the following results from last year’s operations: Sales $ 1,400,000 Variable expenses 720,000...
Westerville Company reported the following results from last
year’s operations:
Sales
$
1,400,000
Variable
expenses
720,000
Contribution
margin
680,000
Fixed
expenses
470,000
Net operating
income
$
210,000
Average
operating assets
$
875,000
At the beginning of this year, the company has a $350,000
investment opportunity with the following cost and revenue
characteristics:
Sales
$
560,000
Contribution
margin ratio
70
% of sales
Fixed
expenses
$
336,000
The company’s minimum required rate of return is 15%.
1. What is the residual...
Ch 11f Westerville Company reported the following results from last year’s operations: Sales $ 1,400,000 Variable...
Ch 11f
Westerville Company reported the following results from last
year’s operations:
Sales
$
1,400,000
Variable expenses
680,000
Contribution margin
720,000
Fixed expenses
440,000
Net operating income
$
280,000
Average operating assets
$
875,000
At the beginning of this year, the company has a $300,000
investment opportunity with the following cost and revenue
characteristics:
Sales
$
480,000
Contribution margin ratio
80
% of sales
Fixed expenses
$
336,000
The company’s minimum required rate of return is 15%.
1. What is...
Westerville Company reported the following results from last year’s operations: Sales $ 1,400,000 Variable expenses 680,000...
Westerville Company reported the following results from last
year’s operations:
Sales
$
1,400,000
Variable expenses
680,000
Contribution margin
720,000
Fixed expenses
440,000
Net operating income
$
280,000
Average operating assets
$
875,000
At the beginning of this year, the company has a $300,000
investment opportunity with the following cost and revenue
characteristics:
Sales
$
480,000
Contribution margin ratio
80
% of sales
Fixed expenses
$
336,000
The company’s minimum required rate of return is 15%.
1. If the company pursues the...
Westerville Company reported the following results from last year’s operations: Sales $ 1,800,000 Variable expenses 740,000...
Westerville Company reported the following results from last
year’s operations: Sales $ 1,800,000 Variable expenses 740,000
Contribution margin 1,060,000 Fixed expenses 700,000 Net operating
income $ 360,000 Average operating assets $ 1,200,000 This year,
the company has a $400,000 investment opportunity with the
following cost and revenue characteristics: Sales $ 600,000
Contribution margin ratio 60 % of sales Fixed expenses $ 288,000
The company’s minimum required rate of return is 10%.
8. If the company pursues the investment opportunity and...
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