Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31:
| Revenues—East | $ 878,000 |
| Revenues—West | 1,042,000 |
| Revenues—Central | 1,880,000 |
| Operating Expenses—East | 563,600 |
| Operating Expenses—West | 619,680 |
| Operating Expenses—Central | 1,172,940 |
| Corporate Expenses—Shareholder Relations | 155,000 |
| Corporate Expenses—Customer Support | 333,000 |
| Corporate Expenses—Legal | 233,100 |
| General Corporate Officers’ Salaries | 278,500 |
The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Customer Support Department is the company’s point of contact for new service, complaints, and requests for repair. The department believes that the number of customer contacts is an activity base for this work. The Legal Department provides legal services for division management. The department believes that the number of hours billed is an activity base for this work. The following additional information has been gathered:
|
East |
West |
Central |
|
| Number of customer contacts | 4,500 | 5,500 | 8,500 |
| Number of hours billed | 1,350 | 2,100 | 2,100 |
| Required: | |
| 1. | Prepare quarterly income statements showing income from operations for the three divisions. Use three column headings: East, West, and Central. |
| 2. | Identify the most successful division according to the profit margin. Enter percentage rounded two decimal places (e.g. 0.22547 is 22.55%). |
| 3. | What would you include in a recommendation to the CEO for a better method for evaluating the performance of the divisions? What is a major weakness of the present method? |
In: Accounting
Red Line Railroad Inc. has three regional divisions organized as
profit centers. The chief executive officer (CEO) evaluates
divisional performance, using income from operations as a percent
of revenues. The following quarterly income and expense accounts
were provided from the trial balance as of December 31:
Revenues—East $ 870,000
Revenues—West 1,034,000
Revenues—Central 1,880,000
Operating Expenses—East 565,700
Operating Expenses—West 621,360
Operating Expenses—Central 1,174,660
Corporate Expenses—Shareholder Relations 150,000
Corporate Expenses—Customer Support 350,000
Corporate Expenses—Legal 264,000
General Corporate Officers’ Salaries 281,000
The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Customer Support Department is the company’s point of contact for new service, complaints, and requests for repair. The department believes that the number of customer contacts is an activity base for this work. The Legal Department provides legal services for division management. The department believes that the number of hours billed is an activity base for this work. The following additional information has been gathered:
East West Central
Number of customer contacts 3,000 4,000 7,000
Number of hours billed 1,300 2,160 2,040
Required:
1. Prepare quarterly income statements showing income from
operations for the three divisions. Use three column headings:
East, West, and Central.
2. Identify the most successful division according to the profit
margin. Enter percentage rounded two decimal places (e.g. 0.22547
is 22.55%).
3. What would you include in a recommendation to the CEO for a
better method for evaluating the performance of the divisions? What
is a major weakness of the present method?
In: Accounting
Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31:
| Revenues—East | $884,000 |
| Revenues—West | 1,050,000 |
| Revenues—Central | 1,870,000 |
| Operating Expenses—East | 568,100 |
| Operating Expenses—West | 623,520 |
| Operating Expenses—Central | 1,170,540 |
| Corporate Expenses—Shareholder Relations | 157,000 |
| Corporate Expenses—Customer Support | 407,000 |
| Corporate Expenses—Legal | 261,000 |
| General Corporate Officers’ Salaries | 270,750 |
The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Shareholder Relations Department and general corporate officers’ salaries are not controllable by division management. The Customer Support Department is the company’s point of contact for new service, complaints, and requests for repair. The department believes that the number of customer contacts is an activity base for this work. The Legal Department provides legal services for division management. The department believes that the number of hours billed is an activity base for this work. The following additional information has been gathered:
|
East |
West |
Central |
|
| Number of customer contacts | 4,500 | 5,500 | 8,500 |
| Number of hours billed | 1,350 | 2,160 | 2,290 |
| Required: | |
| 1. | Prepare quarterly income statements showing income from operations for the three divisions. Use three column headings: East, West, and Central. |
| 2. | Identify the most successful division according to the profit margin. |
| 3. | What would you include in a recommendation to the CEO for a better method for evaluating the performance of the divisions? What is a major weakness of the present method? |
In: Accounting
Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31:
|
Revenues—East |
$ 890,000 |
|---|---|
|
Revenues—West |
1,046,000 |
|
Revenues—Central |
1,880,000 |
|
Operating Expenses—East |
563,900 |
|
Operating Expenses—West |
625,920 |
|
Operating Expenses—Central |
1,167,540 |
|
Corporate Expenses—Shareholder Relations |
159,000 |
|
Corporate Expenses—Customer Support |
314,500 |
|
Corporate Expenses—Legal |
271,200 |
|
General Corporate Officers’ Salaries |
277,750 |
The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Customer Support Department is the company’s point of contact for new service, complaints, and requests for repair. The department believes that the number of customer contacts is an activity base for this work. The Legal Department provides legal services for division management. The department believes that the number of hours billed is an activity base for this work. The following additional information has been gathered:
|
East |
West |
Central |
|
|---|---|---|---|
|
Number of customer contacts |
4,500 |
5,500 |
8,500 |
|
Number of hours billed |
1,250 |
2,100 |
2,300 |
|
Required: |
|||
|
1. |
Prepare quarterly income statements showing income from operations for the three divisions. Use three column headings: East, West, and Central. |
||
|
2. |
Identify the most successful division according to the profit margin. Enter percentage rounded two decimal places (e.g. 0.22547 is 22.55%). |
||
|
3. |
What would you include in a recommendation to the CEO for a better method for evaluating the performance of the divisions? What is a major weakness of the present method? |
||
In: Accounting
ructions
Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31:
| Revenues—East | $ 878,000 |
| Revenues—West | 1,042,000 |
| Revenues—Central | 1,880,000 |
| Operating Expenses—East | 563,600 |
| Operating Expenses—West | 619,680 |
| Operating Expenses—Central | 1,172,940 |
| Corporate Expenses—Shareholder Relations | 155,000 |
| Corporate Expenses—Customer Support | 333,000 |
| Corporate Expenses—Legal | 233,100 |
| General Corporate Officers’ Salaries | 278,500 |
The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Customer Support Department is the company’s point of contact for new service, complaints, and requests for repair. The department believes that the number of customer contacts is an activity base for this work. The Legal Department provides legal services for division management. The department believes that the number of hours billed is an activity base for this work. The following additional information has been gathered:
|
East |
West |
Central |
|
| Number of customer contacts | 4,500 | 5,500 | 8,500 |
| Number of hours billed | 1,350 | 2,100 | 2,100 |
| Required: | |
| 1. | Prepare quarterly income statements showing income from operations for the three divisions. Use three column headings: East, West, and Central. |
| 2. | Identify the most successful division according to the profit margin. Enter percentage rounded two decimal places (e.g. 0.22547 is 22.55%). |
| 3. | What would you include in a recommendation to the CEO for a better method for evaluating the performance of the divisions? What is a major weakness of the present method? |
In: Accounting
Discuss factors that an external auditor should consider in assessing the risk of fraudulent financial reporting committed by a public company CFO or CEO. In discussing this topic, please consider risks of fraudulent financial reporting that are related to the fraud triangle (i.e., incentive/pressure, opportunity, and rationalization.). Also, research factors that the PCAOB and the AICPA identify as fraudulent financial reporting risks.
In: Operations Management
Jack Dorsey (CEO of Twitter & Square) is donating $1 Billion of stock in Square to support the COVID-19 relief. However, he is doing it through an LLC, not directly to a non-profit to retain control of voting rights with his company and not have to pay capital gains on his donation. Do a bit of research on the topic and especially the ethical aspect of the transactions.
In: Accounting
The Boston Bulb Company produces high-cost bulbs for expensive projection equipment. Johnson, the CEO, claims that a particular bulb type has an average life of at least 600 hours.
Fourteen of these bulbs were randomly selected and tested. The number of hours each bulb lasted was:
614,598,585,572,599,605,604,590,609,606,595,592,601,592
At the significance level, test Johnson's claim about the life of the bulbs.
In: Statistics and Probability
Provide a full paragraph biography on each top/key executive for General Motors (Do not include the CEO) Include pictures if possible. The company website is a good source. Based on the photos and backgrounds, how diverse do you feel the make up of the top executives is? Consider the female/male makeup, the ethnic make up and the different races of board members.
In: Operations Management
PLEASE USE LOTS OF DETAILS AND EXAMPLES!
Cameron Mechanical & Automation, Inc. (CMA) is a fictional company that has been in business and operating in the Silicon Valley since 1998. The company began as a successful Internet-based company (dot-com) and experienced great success with the introduction of high technology. The company also experienced decline with other dot-coms in 2001. As a result, CMA restructured and focused on its primary products; that is, computer components. The early changes in the company were done quickly to downsize. Although many other companies failed during this time, CMA managed to move forward.
CMA rebounded and continued to manufacture and sell its components to computer manufacturers worldwide. The company structure was divided into product divisions, with each division focused on specific components. For the company, this structure was meant to streamline sales and delivery worldwide.
In 2008, the economy had an effect on company profits, but the chief executive officer (CEO), Jared Smith, was in a position to focus on several internal strategic areas, including structure, work design, motivation, conflict, and company culture as a whole. To stay profitable, the company had to eliminate several management positions in an effort to flatten the organizational chart. Many of the responsibilities fell to the employees, and many people resisted the change.
As the economy recovers, CMA continues to rebuild. Since 2012, the company has been divided into a functional structure that includes four departments: Research and development (R&D), marketing, production, and finance. Each department is headed by a vice president who has responsibility over each of the functional areas. The company currently sells components to computer manufacturers. As technology continues to advance, the CMA R&D department and its vice president, Kevin Adams, are feeling pressure to keep up with the competition. However, because of the differentiation and separation between the departments, the CEO is concerned that communication is hampered.
Because of the current structure and culture, the vice presidents who run each division of the company have autonomy and are able to use different leadership styles. For example, the vice president of marketing, Jim Stevens, uses a more democratic leadership style, while the vice president of production, Melissa Simons, is adamant that her autocratic or transactional style is the only way to get results. Each leadership style has advantages, but the lack of consistency between divisions may be causing problems for the company as a whole. Further, the CEO is concerned that the workforce may not be as diverse as it should be, but he is not sure how to address the issue.
It is the end of the day, and you are meeting in Jared's office to talk about his conference with the vice presidents.
Jared, the CEO, says: "We talked about how we can change the infrastructure so that it helps organizational culture run efficiently and consistently. Everyone is getting the same message now about how structure and culture need to work in a healthy company."
"You know, it would help if I had something that explained the link between culture and structure. I need to talk to the board about the changes we're making, and I will be talking to staff about what they can expect to happen over the next 6 months. You're a better writer than I am, and I could use a well-written explanation for my discussions."
Jared also says, "Besides explaining the link between culture and structure in this assignment, and based on the problems that CMA has had, what additional changes would you suggest for the company? I want to include your recommendations in the agenda for the next quarterly meeting with the board."
In: Economics