Profit Center Responsibility Reporting for a Service Company
Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers. The chief executive officer (CEO) evaluates divisional performance, using operating income as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31:
| Revenues—N Region | $778,900 |
| Revenues—S Region | 947,700 |
| Revenues—W Region | 1,643,500 |
| Operating Expenses—N Region | 493,600 |
| Operating Expenses—S Region | 564,000 |
| Operating Expenses—W Region | 993,900 |
| Corporate Expenses—Dispatching | 403,200 |
| Corporate Expenses—Equipment Management | 176,000 |
| Corporate Expenses—Treasurer’s | 118,500 |
| General Corporate Officers’ Salaries | 261,600 |
The company operates three support departments: the Dispatching Department, the Equipment Management Department, and the Treasurer’s Department. The Dispatching Department manages the scheduling and releasing of completed trains. The Equipment Management Department manages the railroad cars inventories. It makes sure the right freight cars are at the right place at the right time. The Treasurer’s Department conducts a variety of services for the company as a whole. The following additional information has been gathered:
| North | South | West | ||||
| Number of scheduled trains | 4,800 | 5,800 | 8,600 | |||
| Number of railroad cars in inventory | 1,100 | 1,800 | 1,500 |
Required:
1. Prepare quarterly income statements showing operating income for the three regions. Use three column headings: North, South, and West. Do not round your interim calculations.
| Thomas Railroad Company | |||
| Divisional Income Statements | |||
| For the Quarter Ended December 31 | |||
| North | South | West | |
| Revenues | $ | $ | $ |
| Operating expenses | |||
| Operating income before support department allocations | $ | $ | $ |
| Support department allocations: | |||
| Dispatching | $ | $ | $ |
| Equipment Management | |||
| Total support department allocations | $ | $ | $ |
| Operating income | $ | $ | $ |
2. What is the profit margin of each region? Round to one decimal place.
| Region | Profit Margin |
| North Region | % |
| South Region | % |
| West Region | % |
In: Accounting
Profit Center Responsibility Reporting for a Service Company
Thomas Railroad Company organizes its three divisions, the North (N), South (S), and West (W) regions, as profit centers. The chief executive officer (CEO) evaluates divisional performance, using operating income as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31:
| Revenues—N Region | $964,200 |
| Revenues—S Region | 1,169,300 |
| Revenues—W Region | 1,940,000 |
| Operating Expenses—N Region | 611,000 |
| Operating Expenses—S Region | 695,900 |
| Operating Expenses—W Region | 1,173,200 |
| Corporate Expenses—Dispatching | 437,800 |
| Corporate Expenses—Equipment Management | 264,600 |
| Corporate Expenses—Treasurer’s | 146,600 |
| General Corporate Officers’ Salaries | 323,800 |
The company operates three support departments: the Dispatching Department, the Equipment Management Department, and the Treasurer’s Department. The Dispatching Department manages the scheduling and releasing of completed trains. The Equipment Management Department manages the railroad cars inventories. It makes sure the right freight cars are at the right place at the right time. The Treasurer’s Department conducts a variety of services for the company as a whole. The following additional information has been gathered:
| North | South | West | ||||
| Number of scheduled trains | 5,000 | 6,000 | 8,900 | |||
| Number of railroad cars in inventory | 1,100 | 1,700 | 1,400 |
Required:
1. Prepare quarterly income statements showing operating income for the three regions. Use three column headings: North, South, and West. Do not round your interim calculations.
| Thomas Railroad Company | |||
| Divisional Income Statements | |||
| For the Quarter Ended December 31 | |||
| North | South | West | |
| Revenues | $ | $ | $ |
| Operating expenses | |||
| Operating income before support department allocations | $ | $ | $ |
| Support department allocations: | |||
| Dispatching | $ | $ | $ |
| Equipment Management | |||
| Total support department allocations | $ | $ | $ |
| Operating income | $ | $ | $ |
2. What is the profit margin of each region? Round to one decimal place.
| Region | Profit Margin |
| North Region | % |
| South Region | % |
| West Region | % |
In: Accounting
At the end of September, the Stone Company had units that were 10% complete as to labor and overhead. Stone adds all materials at the beginning of the process. The costs associated with these units were:
Direct materials 94,000
Direct labor 3,000
Overhead 1,000
Production data for September and October units were as follows:
September's ending work-in-process 20,000
October's ending work-in-process 10,000
Units completed during October 40,000
During October, the costs incurred were $90,000 for materials and $40,000 for labor and $50,300 for overhead. The units at the end of October were 50% complete as to labor and overhead. Calculate the following using the FIFO method. Label the appropriate letters for each answer and circle your final answer:
a. The equivalent units produced as to materials, labor and overhead.
b. The total unit cost for October.
c. The total unit cost for September.
d. The unit cost of those finished and transferred out during October.
e. The cost of inventory on October 31st
ANONYMOUS, please DO NOT answer this question. You have given me 2 different answers and some of your numbers do not add up to the totals you have written. Please let someone else answer this question. Thank you
In: Accounting
The Wright Company recorded the following inventory information during the month of October:
|
UNITS |
UNIT COST |
TOTAL COST |
UNITS ON HAND |
|
|
Balance on October 1 |
2,000 |
$1.00 |
$2,000 |
2,000 |
|
Purchased on October 8 |
1,200 |
$3.00 |
$3,600 |
3,200 |
|
Sold on October 20 |
1,500 |
1,700 |
||
|
Purchased on October 22 |
2,000 |
$4.00 |
$8,000 |
3,700 |
|
Sold on October 28 |
2,200 |
1,500 |
||
|
Purchase on October 29 |
1,000 |
$5.00 |
$5,000 |
2,500 |
Part B: Using the partially computed tables on the next three pages, compute the cost of goods sold and the cost of the 2,500 units in ending inventory under each of the assumptions given above.
LIFO – Perpetual
|
Date |
Purchases |
Sales |
Inventory on Hand |
||||||
|
Units |
Cost |
Total |
Units |
Cost |
Total |
Units |
Cost |
Total |
|
|
10/1 |
2,000 |
$1.00 |
$2,000 |
||||||
|
10/8 Purchased 1,200 units |
1,200 |
$3.00 |
$3,600 |
2,000 1,200 3,200 |
$1.00 $3.00 |
$2,000 $3,600 $5,600 |
|||
|
10/20 Sold 1,500 units |
1,200 300 1,500 |
$3.00 $1.00 |
$3,600 $ 300 $3,900 |
1,700 |
$1.00 |
$1,700 |
|||
|
10/22 Purchased 2,000 units |
|||||||||
|
10/28 Sold 2,200 units |
|||||||||
|
10/29 Purchased 1,000 units |
|||||||||
|
TOTALS |
|||||||||
In: Accounting
Strategic Human Resources – Assignment Sheet 2
Case Study:
In the past, the decision criteria for mergers and acquisitions
were typically based on considerations such as the strategic fit of
the merged organizations, financial criteria, and operational
criteria. Mergers and acquisitions were often conducted without
much regard for the human resource issues that would be faced when
the organizations were joined. As a result, several undesirable
effects on the organizations’ human resources commonly occurred.
Nonetheless, competitive conditions favor mergers and acquisitions
and they remain a frequent occurrence. Examples of mergers among
some of the largest companies include the following: Honeywell and
Allied Signal, British Petroleum and Amoco, Exxon and Mobil,
Lockheed and Martin, Boeing and McDonnell Douglas, SBC and Pacific
Telesis, America Online and Time Warner, Burlington Northern and
Santa Fe, Union Pacific and Southern Pacific, Daimler-Benz and
Chrysler, Ford and Volvo, and Bank of America and Nations
Bank.
Layoffs often accompany mergers or acquisitions, particularly if
the two organizations are from the same industry. In addition to
layoffs related to redundancies, top managers of acquiring firms
may terminate some competent employees because they do not fit in
with the new culture of the merged organization or because their
loyalty to the new management may be suspect. The desire for a good
fit with the cultural objectives of the new organization and
loyalty are understandable. However, the depletion of the stock of
human resources deserves serious consideration, just as with
physical resources. Unfortunately, the way that mergers and
acquisitions have been carried out has often conveyed a lack of
concern for human resources.
A sense of this disregard is revealed in the following
observation:
Post combination integration strategies vary in tactics, some
resemble to “marriage & love’ but in reality, collaborative
mergers are much more hostile in implementing forceful decision and
financial takeovers. Yet, as a cursory scan of virtually any
newspaper or popular business magazine readily reveals, the simple
fact is that the latter are much more common than the former.
The cumulative effects of these developments often cause employee
morale and loyalty to decline, and feelings of betrayal may
develop. Nonetheless, such adverse consequences are not inevitable.
A few companies, such as Cisco Systems, which has made over 50
acquisitions
(https://www.cisco.com/c/en/us/about/corporate-strategy-office/acquisitions/acquisitions-list-years.html),
are very adept in handling the human resource issues associated
with these actions. An example of one of Cisco’s practices is
illustrative. At Cisco Systems, no one from an acquired firm is
laid off without the personal approval of Cisco’s CEO as well as
the CEO of the firm that was acquired.
QUESTIONS:
1. Interview someone who has been through a merger or acquisition.
Find out how they felt as an employee. Determine how they and their
coworkers were affected. Ask about the effects on productivity,
loyalty, and morale. Find out what human resource practices were
used and obtain their evaluations of what was helpful or
harmful.
In: Operations Management
Consider 50 moles of carbon dioxide in a piston-cylinder that is isothermally compressed at temperature of T=350 K from 100 kPa to 400 kPa. What are the changes in the total entropy (of the Universe), the system, and the surroundings if the gas is compressed using a heat reservoir at a temperature of 350 K? Using a heat reservoir at a temperature of 250 K? You can assume that the processes within the piston-cylinder system are internally reversible.
In: Mechanical Engineering
The manufacturer of a brand of mattresses will make x hundred units available in the market when the unit price is
p = 150 + 60e0.05x
dollars.
(a) Find the number of mattresses the manufacturer will make
available in the market place if the unit price is set at
$350/mattress. (Round your answer to the nearest integer.)
(b) Find the producers' surplus if the unit price is set at
$350/mattress. (Round your answer to the nearest dollar.)
$
In: Math
In: Statistics and Probability
The student will look for one (1) article that presents the topic of the Primary and Secondary Financial Markets of the United States.
Write a 350-word essay that distinguishes the functions of these two (2) types of markets.
The student will look for one (1) article about the role of the investment banker and the
different sources of capital that corporations have.
Write a 350 word essay where you evaluate the functions of this
Participant of the financial markets.
In: Finance
PE 6-5A Transactions for buyer and seller
Sather Co. sold merchandise to Boone Co. on account, $31,800, terms 2/15, n/30. The cost of the merchandise sold is $19,000. Journalize the entries for Sather Co. and Boone Co. for the sale, purchase, and payment of amount due. Assume all discounts are taken.
PE 6-5B Transactions for buyer and seller
Shore Co. sold merchandise to Blue Star Co. on account, $112,000, terms FOB shipping point, 2/10, n/30. The cost of the merchandise sold is $67,200. Shore Co. paid freight of $1,800. Journalize the entries for Shore Co. and Blue Star Co. for the sale, purchase, and payment of amount due. Assume all discounts are taken.
In: Accounting