The Asphalt Division of Sierra Industries is operated as a profit center. Sales for the division...

The Asphalt Division of Sierra Industries is operated as a profit center. Sales for the division were budgeted for 2016 at $1,200,000. The only variable costs budgeted for the division were cost of goods sold ($590,000) and selling and administrative ($80,000). Fixed costs were budgeted at $130,000 for cost of goods sold, $120,000 for selling and administrative and $95,000 for noncontrollable fixed costs. Actual results for these items were:

Sales $1,185,000

Cost of goods sold

Variable 545,000

Fixed 140,000

Selling and administrative

Variable 82,000

Fixed 90,000

Noncontrollable fixed 105,000

Instructions

a. Prepare a responsibility report for the Asphalt Division for 2016.

b. Assume the division is an investment center, and average operating assets were $1,200,000. Compute ROI.

Expert Solution

ekkarill92 answered 1 year ago

The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the...

The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2020 at $905,000. The only variable costs budgeted for the division were cost of goods sold ($441,000) and selling and administrative ($63,000). Fixed costs were budgeted at $101,000 for cost of goods sold, $94,000 for selling and administrative, and $75,000 for noncontrollable fixed costs. Actual results for these items were: Sales $884,000 Cost of goods sold Variable 415,000 Fixed 107,000...

Mountain Industries operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit...

Mountain Industries operates a Manufacturing Division and an Assembly Division. Both divisions are evaluated as profit centers. Assembly buys components from Manufacturing and assembles them for sale. Manufacturing sells many components to third parties in addition to Assembly. Selected data from the two operations follow: Manufacturing Assembly Capacity (units) 215000 115000 Sales price * $ 108 $ 375 Variable costs† $ 48 $ 150 Fixed costs $ 10150000 $ 6150000 * For Manufacturing, this is the price to third parties....

2.2. Develop a profit-and-loss statement for the Westgate division of North Industries. This division manufactures light...

2.2. Develop a profit-and-loss statement for the Westgate division of North Industries. This division manufactures light fixtures sold to consumers through home improvement and hardware stores. Cost of goods sold represents 30% of net sales. Marketing expenses include selling expenses, promotion expenses, and freight. Selling expenses include sales salaries totaling $4 million per year and sales commissions (4% of sales). The company spent $4 million on advertising last year, and freight costs were 4% of sales. Other costs include $2...

The Deluxe Division, a profit center of Riley Manufacturing Company, reported the following data for the...

The Deluxe Division, a profit center of Riley Manufacturing Company, reported the following data for the first quarter of 2013: Sales $9,000,000 Variable costs 6,300,000 Controllable direct fixed costs 1,200,000 Noncontrollable direct fixed costs 530,000 Indirect fixed costs 300,000 Instructions (a) Prepare a performance report for the manager of the Deluxe Division. (b) What is the best measure of the manager's performance? Why? (c) How would the responsibility report differ if the division was an...

Develop a profit-and-loss statement for the Westgate division of North Industries. This division manufactures light fixtures sold...

Develop a profit-and-loss statement for the Westgate division of North Industries. This division manufactures light fixtures sold to consumers through home improvement and hardware stores. Cost of goods sold represents 25% of net sales. Marketing expenses include selling expenses, promotion expenses, and freight. Selling expenses include sales salaries totaling $6 million per year and sales commissions (4% of sales). The company spent $5 million on advertising last year, and freight costs were 4% of sales. Other costs include $3 million for managerial salaries and expenses for...

ABC Unicycle makes unicycles and has two divisions. Each division is evaluated as a profit center. The...

ABC Unicycle makes unicycles and has two divisions. Each division is evaluated as a profit center. The Wheel division, located in Nambia, produces unicycle wheels and can choose to sell wheels on either the open market at $30 per wheel, or sell them to the Assembly division. The Assembly division, located in Elbonia, assembles unicycles and can choose to either buy wheels from the Wheel division or purchase wheels on the open market. Wheel Assembly Cost per unit Division Division Direct Labour $2.00 $6.00 Variable Materials 3.00 7.00...

One division produces operating profit of $ 500,000 and the second division produces operating profit of...

One division produces operating profit of $ 500,000 and the second division produces operating profit of $ 3 million. Which divisional manager is the best? Explain your answer.

Profit Center Responsibility Reporting On-Demand Sports Co. operates two divisions—the Action Sports Division and the Team...

Profit Center Responsibility Reporting On-Demand Sports Co. operates two divisions—the Action Sports Division and the Team Sports Division. The following income and expense accounts were provided as of November 30, 20Y1, the end of the current fiscal year, after all adjustments, including those for inventories, were recorded: Sales—Action Sports (AS) Division $26,775,000 Sales—Team Sports (TS) Division 29,580,000 Cost of Goods Sold—Action Sports (AS) Division 16,065,000 Cost of Goods Sold—Team Sports (TS) Division 17,085,000 Sales Expense—Action Sports (AS) Division 4,590,000 Sales...

Profit Center Responsibility Reporting XSport Sporting Goods Co. operates two divisions—the Winter Sports Division and the...

Profit Center Responsibility Reporting XSport Sporting Goods Co. operates two divisions—the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales—Winter Sports Division $29,452,500 Sales—Summer Sports Division 32,538,000 Cost of Goods Sold—Winter Sports Division 17,671,500 Cost of Goods Sold—Summer Sports Division 18,793,500 Sales Expense—Winter Sports Division 5,049,000...

Profit Center Responsibility Reporting Glades Sporting Goods Co. operates two divisions—the Winter Sports Division and the...

Profit Center Responsibility Reporting Glades Sporting Goods Co. operates two divisions—the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y8, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted: Sales—Winter Sports Division $36,907,500 Sales—Summer Sports Division 40,774,000 Cost of Goods Sold—Winter Sports Division 22,144,500 Cost of Goods Sold—Summer Sports Division 23,550,500 Sales Expense—Winter Sports Division 6,327,000...

Question