Question
In: Accounting
Three divisions of Jameson Co. report the following sales and operating data: Fitness Training Spa Services...
| Three divisions of Jameson Co. report the following sales and operating data: |
| Fitness Training |
Spa Services |
Athletic Wear |
|||||||
| Sales | $ | 600,000 | $ | 750,000 | $ | 400,000 | |||
| Average operating assets | $ | 200,000 | $ | 250,000 | $ | 100,000 | |||
| Operating income | $ | 30,000 | $ | 37,500 | $ | 24,000 | |||
| Minimum required rate of return | 10 | % | 12 | % | 10 | % | |||
| Required: | |
| a. |
Compute the ROI for the Athletic Wear division (state as a whole number i.e. 17 for 17%, no decimals, no % sign) |
Answer:
| b. |
Compute the Residual Income (RI) for the Spa Services
division |
Answer:
Solutions
Expert Solution
Answer
ROI for the Athletic Wear division = 24%
Residual Income (RI) for the Spa Services = $ 7,500
Calculations:
| Fitness Training | Spa services | Atheletic wear | ||
| A | Sales | $ 600,000 | $ 750,000 | $ 400,000 |
| B | Average operating assets | $ 200,000 | $ 250,000 | $ 100,000 |
| C | Operating income | $ 30,000 | $ 37,500 | $ 24,000 |
| D | Minimum required rate of return | 10 | 12 | 10 |
| C/B*100 | ROI | 15% | 15% | 24% |
| C-(B*D) | Residual Income (RI) | $ 10,000 | $ 7,500 | $ 14,000 |
In case of any doubt or clarification, you're welcome to come back via comments.
ekkarill92 answered 2 years agoRelated Solutions
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of
different structural engineering firms are given as follows:
Division A
Division B
Division C
Sales
$
12,000,000
$
14,000,000
$
25,000,000
Average operating assets
$
3,000,000
$
7,000,000
$
5,000,000
Net operating income
$
600,000
$
560,000
$
800,000
Minimum required rate of return
14
%
10
%
16
%
Required:
1. Compute the return on investment (ROI) for each division
using the formula stated in terms of margin and turnover....
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of
different structural engineering firms are given as follows:
Division A
Division B
Division C
Sales
$
12,600,000
$
35,750,000
$
20,600,000
Average operating assets
$
3,150,000
$
7,150,000
$
5,150,000
Net operating income
$
516,600
$
572,000
$
597,400
Minimum required rate of return
9.00
%
9.50
%
11.60
%
Required:
1. Compute the return on investment (ROI) for each division
using the formula stated in terms of margin and turnover....
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of
different structural engineering firms are given as follows:
Division A
Division B
Division C
Sales
$
5,100,000
$
9,100,000
$
8,200,000
Average operating assets
$
1,020,000
$
2,275,000
$
1,640,000
Net operating income
$
214,200
$
746,200
$
118,900
Minimum required rate of return
17.00
%
32.80
%
14.00
%
Required:
1. Compute the return on investment (ROI) for each division
using the formula stated in terms of margin and turnover....
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of
different structural engineering firms are given as follows:
Division A Division B Division C Sales $ 12,280,000 $ 35,350,000 $
20,280,000 Average operating assets $ 3,070,000 $ 7,070,000 $
5,070,000 Net operating income $ 601,720 $ 600,950 $ 567,840
Minimum required rate of return 10.00 % 10.50 % 11.20 % Required:
1. Compute the return on investment (ROI) for each division using
the formula stated in terms of margin and turnover....
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of
different structural engineering firms are given as follows:
Division A
Division B
Division C
Sales
$
12,360,000
$
28,360,000
$
25,450,000
Average operating assets
$
3,090,000
$
7,090,000
$
5,090,000
Net operating income
$
494,400
$
453,760
$
636,250
Minimum required rate of return
7.00
%
7.50
%
12.50
%
Required:
1. Compute the return on investment (ROI) for each division
using the formula stated in terms of margin and turnover....
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of
different structural engineering firms are given as follows:
Division A
Division B
Division C
Sales
$
12,120,000
$
28,120,000
$
20,120,000
Average
operating assets
$
3,030,000
$
7,030,000
$
5,030,000
Net operating
income
$
496,920
$
449,920
$
503,000
Minimum required
rate of return
7.00
%
7.50
%
10.00
%
Required:
1. Compute the return on investment (ROI) for each division
using the formula stated in terms of margin and turnover....
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of
different structural engineering firms are given as follows:
Division A
Division B
Division C
Sales
$
16,000,000
$
36,000,000
$
20,800,000
Average operating assets
$
3,200,000
$
7,200,000
$
5,200,000
Net operating income
$
752,000
$
576,000
$
540,800
Minimum required rate of return
9.00
%
9.50
%
10.40
%
Required:
1. Compute the margin, turnover, and return on investment (ROI)
for each division.
2. Compute the residual income (loss) for...
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of
different structural engineering firms are
given as follows:
Division A
Division B
Division C
Sales
$
5,600,000
$
9,600,000
$
8,700,000
Average operating assets
$
1,120,000
$
3,200,000
$
1,740,000
Net operating income
$
263,200
$
835,200
$
169,650
Minimum required rate of return
16.00
%
26.10
%
13.00
%
Required:
1.
Compute the return on investment (ROI) for each division using
the formula stated in terms of margin and turnover....
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of
different structural engineering firms are given as follows:
Division A
Division B
Division C
Sales
$
6,900,000
$
10,900,000
$
10,000,000
Average operating assets
$
1,725,000
$
5,450,000
$
2,500,000
Net operating income
$
414,000
$
1,090,000
$
325,000
Minimum required rate of
return
19.00
%
20.00
%
16.00
%
Required:
1. Compute the return on investment (ROI) for each division
using the formula stated in terms of margin and...
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of
different structural engineering firms are given as follows:
Division
A
Division
B
Division C
Sales
$12,000,000
$14,000,000
$25,000,000
Average operating
assets
$3,000,000
$7,000,000
$5,000,000
Net operating
income
$600,000
$560,000
$800,000
Minimum required rate of
return
14%
10%
16%
Required:
1. Compute the
return on investment (ROI) for each division using the formula
stated in terms of margin and turnover.
ANSWER: Division A margin
=
__________
...
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