Calculate ROI for each division

Assignment Help Financial Accounting
Reference no: EM132800132

Question - Pool Accessories, Inc., has two divisions-Furniture and Supplies. (This is the same company as the previous exercise. This exercise can be assigned independently.) Segmented income statement information for the most recent fiscal year ended December 31 is shown as follows. Assume the Furniture division had average operating assets totaling $6,500,000 for the year, and the Supplies division had average operating assets of $1,750,000.

Pool Accessories, Inc. Segmented Income Statements For the Current Fiscal Year Ended December 31

 

Furniture Division

Supplies Division

Sales

$3,000,000

$1,000,000

Cost of Goods Sold

1,600,000

430,000

Gross Margin

$1,400,000

$570,000

Allocated Overhead

375,000

125,000

Selling and Administrative Expenses

250,000

200,000

Operating Income

$775,000

$245,000

Income Tax Expense (30% rate)

232,000

73,500

Net Income

$542,500

$171,500

Required - Please calculate ROI for each division. What does ROI tell us about each division? Indicate why this measure is useful in evaluating investment centers.

Reference no: EM132800132

Questions Cloud

Analysis of the output of a process : Analysis of the output of a process has suggested that the variability is nonrandom on several occasions recently.
What is the annual holding cost : Demand for the BMX Bike at Toby's is 600 units per month. Toby's incurs a fixed order placement, transportation, and receiving cost of $ 3,500 each time an
Difference between mass and interpersonal communication : In class this week (and in your text) you were presented with the idea of mass communication. What is the difference between mass communication.
Fully explain pros and cons to leveling out production : Fully explain pros and cons to leveling out production in an organization and the impact in the warehousing environment.
Calculate ROI for each division : Please calculate ROI for each division. What does ROI tell us about each division? Indicate why this measure is useful in evaluating investment centers
Develop various strategies to motivate and engage students : It is important to identify and develop various strategies to motivate and engage students in science. Review the resources in this week's topic materials.
Explain the importance of an erp system : Explain the importance of an ERP system if a customer is looking for a pair of golf shoes and is not available in the store she visited.
How you would incorporate sustainability and ethics : In the last two paragraphs, discuss a) how these insights will serve you in your current/future occupational choice and b) how you would incorporate.
Advantages and disadvantages of on-demand crm : What are the advantages and disadvantages of on-demand CRM for a small to midsized company? What are the advantages and disadvantages for a large company?

Reviews

Write a Review

Financial Accounting Questions & Answers

  What are the capital structure weights that Moe should use

What are the capital structure weights that Moe's should use to analyze its capital structure? In addition, the firm also has 114,000 bonds outstanding

  What was the value of the inventory

A company had inventory on November 1, of 5 units at a cost of $10 each. OnNovember 2, they purchased 19 units at $12 each. On November 6, they purchased15 units at $15 each. On November 8, 17 units were sold for $45 each. Using theLIFO perpetual inv..

  Compute what is the annual rate of interest on the loan

The treasurer of Brandon Blue Sox is seeking a $20,000 loan for 180 days from the Brandon Credit Union,What is the annual rate of interest on the loan?

  Determine the operating income for the olive oil

Determine the operating income for the Olive Oil Div'n using a transfer price of $4.

  Explain how intra-group transactions should be treated

HA2032-Corporate and Financial Accounting-HOLMES INSTITUTE, Australia: Discuss the key principles and provide examples which explain how intra-group.

  What is the value of the shares after a year

Christopher expects a 7% return on his investment and plans to hold the shares of Clider Rex Company for a year. What is the value of the shares after a year?

  Interest payments occur on the last date

If a surplus occurs funds are used to repay loans or to invest in short-term assets. All borrowing, repayments, and interest payments occur on the last date of the month.

  Cost of common equity and waccmidwest electric company mec

cost of common equity and wacc.midwest electric company mec uses only debt and common equity. it can borrow unlimited

  Isolation successfully defended the patent

Isolation successfully defended the patent in a lawsuit at a cost of $78,100. If required, round your answer to the nearest dollar.

  How much can withdraw each year for the next four years

You can earn an annual rate of 8% on your investments. How much can you withdraw each year (end of year) for the next 4 years?

  How much was the gain or loss experienced by briar

How much was the gain or loss experienced by Briar in reacquiring its 5% bonds? Provide the journal entries to retire the bond on July 1st, 2017

  Other alternative ways to account for the investment

On January 1, 2016, Big Company spent $350,000 for a 20 percent interest in Little Company. There is no difference between the purchase price and the book value of the net assets acquired. In your opinion, how should Big account for the investment? W..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd