Question
In: Accounting
Mary’s Auto Shop Inc. allows its divisions to operate as autonomous units. Their results for the...
Mary’s Auto Shop Inc. allows its divisions to operate as autonomous units. Their results for the current year were as follows: Sport Terrain City Revenues $2,200,000 $995,000 $6,600,000 Current assets 290,000 90,000 620,000 Capital assets 870,000 660,000 1,590,000 Current liabilities 100,000 100,000 500,000 Net operating income 230,000 40,000 600,000 After-tax income 184,000 32,000 480,000 Weighted average cost of capital 10% 10% 10% Required: For each division compute (to two decimal) the:
1. Return on sales in %
2. Return on investment (to two decimal) based on total assets employed in %
3. Economic value added 4. Residual income based on net operating income
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Mary’s Auto Shop Inc. allows its divisions to operate as autonomous units. Their results for the...
Mary’s Auto Shop Inc. allows its divisions to operate as
autonomous units. Their results for the current year were as
follows:
Sport
Terrain
City
Revenues
$2,300,000
$996,000
$6,650,000
Current assets
291,000
91,000
621,000
Capital assets
870,000
660,000
1,590,000
Current liabilities
100,000
100,000
500,000
Net operating income
230,000
40,000
600,000
After-tax income
184,000
32,000
480,000
Weighted average cost of capital
10%
10%
10%
Required:
For each division compute (to two decimal) the:
11. Return on sales in %
12....
Mary’s Auto Shop Inc. allows its divisions to operate as autonomous units. Their results for the...
Mary’s Auto Shop Inc. allows its
divisions to operate as autonomous units. Their results for the
current year were as follows:
Sport
Terrain
City
Revenues
$1,700,000
$800,000
$6,000,000
Current assets
230,000
40,000
410,000
Capital assets
870,000
660,000
1,590,000
Current liabilities
100,000
100,000
500,000
Net operating income
230,000
40,000
600,000
After-tax income
184,000
32,000
480,000
Weighted average cost of capital
10%
10%
10%
Required:
For each division compute (to two
decimal) the:
Return on sales in %
Return on investment (to...
Mary’s Auto Shop Inc. allows its divisions to operate as autonomous units. Their results for the...
Mary’s Auto Shop Inc. allows its
divisions to operate as autonomous units. Their results for the
current year were as follows:
Sport
Terrain
City
Revenues
$2,200,000
$995,000
$6,600,000
Current assets
290,000
90,000
620,000
Capital assets
870,000
660,000
1,590,000
Current liabilities
100,000
100,000
500,000
Net operating income
230,000
40,000
600,000
After-tax income
184,000
32,000
480,000
Weighted average cost of capital
10%
10%
10%
Required:
For each division compute (to two
decimal) the:
Return on sales in %
Return on...
Mary’s Auto Shop Inc. allows its divisions to operate as autonomous units. Their results for the...
Mary’s Auto Shop Inc. allows its
divisions to operate as autonomous units. Their results for the
current year were as follows:
Sport
Terrain
City
Revenues
$2,200,000
$995,000
$6,600,000
Current assets
290,000
90,000
620,000
Capital assets
870,000
660,000
1,590,000
Current liabilities
100,000
100,000
500,000
Net operating income
230,000
40,000
600,000
After-tax income
184,000
32,000
480,000
Weighted average cost of capital
10%
10%
10%
Required:
For each division compute (to two
decimal) the:
Return on sales in %
Return on...
Mary’s Auto Shop Inc. allows its divisions to operate as autonomous units. Their results for the...
Mary’s Auto Shop Inc. allows its
divisions to operate as autonomous units. Their results for the
current year were as follows:
Sport
Terrain
City
Revenues
$2,400,000
$997,000
$6,660,000
Current assets
292,000
92,000
622,000
Capital assets
870,000
660,000
1,590,000
Current liabilities
100,000
100,000
500,000
Net operating income
230,000
40,000
600,000
After-tax income
184,000
32,000
480,000
Weighted average cost of capital
10%
10%
10%
Required:
For each division compute (to two
decimal) the:
Return on sales in %
Return on...
Mark’s Auto Shop Inc. allows its divisions to operate as autonomous units. Their results for the...
Mark’s Auto Shop Inc. allows its divisions to operate as
autonomous units. Their results for the current year were as
follows:
Sport
Terrain
City
Revenues
$1,850,000
$920,000
$3,400,000
Current assets
268,000
155,800
1,255,000
Capital assets
1,250,000
430,000
890,000
Current liabilities
225,000
78,6000
795,000
Net operating income
228,000
250,000
350,000
After-tax income
159,600
175,000
245,000
Weighted average cost of capital
7%
7%
7%
Required:
For each division compute the
a. return on sales
b. return on investment based on...
Lily factory allows its departments to operate as autonomous units. Their results for the current year...
Lily factory allows its departments to operate as autonomous
units. Their results for the current year were as follows:
Candy Beverage Packaging
Revenues $2,200,000 $670,000
$1,200,000 Current assets 320,000
112,000 535,000 Capital assets
765,000 488,000 1,320,000 Current
liabilities 276,000 107,000
432,000 Net operating income 312,000
57,000 420,000 After-tax income
218,000 39,000 299,000 Weighted average
cost of capital 7.5% 7.5%
7.5%
Required: For each division compute the:
1. Return on sales
2. Return on investment based on total assets
employed...
Al Huma Construction Company has three divisions that operate autonomously. Their results for 2015 are as...
Al Huma Construction Company has three divisions that operate
autonomously. Their results for 2015 are as follows:
A
B
C
Sales
$8,000,000
$10,000,000
$6,000,000
Contribution margin
3,000,000
6,000,000
2,500,000
Operating income
2,200,000
7,200,000
3,500,000
Investment base
10,000,000
12,000,000
14,000,000
The company's desired rate of return is 20%. The company is
planning an expansion, which will require each division to increase
its investments by $3,000,000 and its income by
$1,000,000.
Required:
Compute the current return on Investment (ROI) and Residual
Income...
Assume you own and operate an auto repair shop in which you work and employ Harriet,...
Assume you own and operate an auto repair shop in which you work
and employ Harriet, a mechanic whose skills are very similar to
yours, at $45,000 per year. Also assume that you do not pay
yourself but rather hope for a profit at the end of the year.
A. would the cost of your labor be an accounting cost?
explain?
B. would the cost of your labor be an implicit cost?
Explain?
C. Would the caculated profit at the...
A manufacturing shop is designed to operate most efficiently at an output of 580 units per...
A manufacturing shop is designed to operate most efficiently at
an output of 580 units per day. In the past month the plant
averaged 510 units per day.
What was their capacity utilization rate last month?
(Round your answer to 1 decimal place.)
Capacity utilization rate
%
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