Question
In: Accounting
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales revenue $ 1,215,000 $ 1,804,000 Cost of goods sold and operating expenses 898,000 1,282,000 Net operating income $ 317,000 $ 522,000 Average invested assets $ 1,120,000 $ 1,470,000 The company’s hurdle rate is 7.76 percent.
Required: 1. Calculate return on investment (ROI) and residual income for each division for last year.
2. Recalculate ROI and residual income for the division for each independent situation that follows: a. Operating income increases by 9 percent. b. Operating income decreases by 9 percent. c. The company invests $247,000 in each division, an amount that generates $108,000 additional income per division. d. Coolbrook changes its hurdle rate to 5.76 percent.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales...
Coolbrook Company has the following information available for
the past year:
River Division
Stream Division
Sales revenue
$
1,206,000
$
1,804,000
Cost of goods sold and operating
expenses
887,000
1,283,000
Net operating income
$
319,000
$
521,000
Average invested assets
$
1,070,000
$
1,560,000
The company’s hurdle rate is 7.26 percent.
Required:
1. Calculate return on investment (ROI) and residual
income for each division for last year. (Enter your ROI
answers as a percentage rounded to two decimal places,...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales...
Coolbrook Company has the following information available for
the past year:
River Division
Stream Division
Sales revenue
$
1,217,000
$
1,809,000
Cost of goods sold and operating
expenses
888,000
1,289,000
Net operating income
$
329,000
$
520,000
Average invested assets
$
1,070,000
$
1,410,000
The company’s hurdle rate is 7.76 percent.
1. Calculate return on investment (ROI) and
residual income for each division for last year. (Enter
your ROI answers as a percentage rounded to two decimal places,
(i.e., 0.1234...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales...
Coolbrook Company has the following information available for
the past year:
River Division
Stream Division
Sales revenue
$
1,208,000
$
1,812,000
Cost of goods sold and operating expenses
893,000
1,286,000
Net operating income
$
315,000
$
526,000
Average invested assets
$
1,190,000
$
1,530,000
The company’s hurdle rate is 7.01 percent.
Required:
1. Calculate return on investment (ROI) and
residual income for each division for last year.
2. Recalculate ROI and residual income for the
division for each independent situation...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales...
Coolbrook Company has the following information available for
the past year: River Division Stream Division Sales revenue $
1,216,000 $ 1,804,000 Cost of goods sold and operating expenses
881,000 1,296,000 Net operating income $ 335,000 $ 508,000 Average
invested assets $ 1,090,000 $ 1,520,000 The company’s hurdle rate
is 6.76 percent.
Required: 1. Calculate return on investment (ROI) and residual
income for each division for last year. (Enter your ROI answers as
a percentage rounded to two decimal places, (i.e.,...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales...
Coolbrook Company has the following information available for
the past year:
River Division
Stream Division
Sales revenue
$
1,201,000
$
1,801,000
Cost of goods sold and operating
expenses
894,000
1,280,000
Net operating income
$
307,000
$
521,000
Average invested assets
$
1,090,000
$
1,520,000
The company’s hurdle rate is 7.01 percent.
Required:
1. Calculate return on investment (ROI) and residual
income for each division for last year. (Enter your ROI
answers as a percentage rounded to two decimal places,...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales...
Coolbrook Company has the following information available for
the past year:
River Division
Stream Division
Sales revenue
$
1,216,000
$
1,819,000
Cost of goods sold and operating expenses
890,000
1,292,000
Net operating income
$
326,000
$
527,000
Average invested assets
$
1,080,000
$
1,450,000
The company’s hurdle rate is 7.76 percent.
Required:
1. Calculate return on investment (ROI) and residual
income for each division for last year. (Enter your ROI
answers as a percentage rounded to two decimal places,...
Coolbrook Company has the following information available for the past year: River Division Stream Division Sales...
Coolbrook Company has the following information available for
the past year:
River Division
Stream Division
Sales revenue
$
1,212,000
$
1,807,000
Cost of goods sold and operating expenses
894,000
1,292,000
Net operating income
$
318,000
$
515,000
Average invested assets
$
1,170,000
$
1,400,000
The company’s hurdle rate is 8.01 percent.
Required:
1. Calculate return on investment (ROI) and residual
income for each division for last year. (Enter your ROI
answers as a percentage rounded to two decimal places,...
1. Coolbrook Company has the following information available for the past year: River Division Stream Division...
1. Coolbrook Company has the following information available for
the past year:
River Division
Stream Division
Sales revenue
$
1,205,000
$
1,812,000
Cost of goods sold and operating expenses
890,000
1,284,000
Net operating income
$
315,000
$
528,000
Average invested assets
$
1,120,000
$
1,520,000
The company’s hurdle rate is 6.76 percent.
Required:
1. Calculate return on investment (ROI) and
residual income for each division for last year.
2. Recalculate ROI and residual income for the
division for each...
The following information for the past year is available from Thinnews Co., a company that uses...
The following information for the past year is available from
Thinnews Co., a company that uses machine hours to apply factory
overhead:
Actual total factory overhead
cost
$24,000
Actual fixed overhead cost
$10,000
Budgeted fixed overhead
cost
$11,000
Actual machine hours
5,000
Standard machine hours for the
units manufactured
4,800
Denominator volume—machine
hours
5,500
Standard variable overhead rate
per machine hour
$3
1.The total actual variable factory overhead cost incurred
during the year was:
2.The standard fixed overhead application rate...
The following information for the past year is available from Thinnews Co., a company that uses...
The following information for the past year is available from
Thinnews Co., a company that uses machine hours to apply factory
overhead:
Actual total factory overhead
cost
$24,000
Actual fixed overhead cost
$10,000
Budgeted fixed overhead
cost
$11,000
Actual machine hours
5,000
Standard machine hours for the
units manufactured
4,800
Denominator volume—machine
hours
5,500
Standard variable overhead rate
per machine hour
$3
1. The variable overhead spending variance is:
2. Under a three-variance breakdown (decomposition) of the total
factory overhead...
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