Compute Roy margin

Assignment Help Managerial Accounting
Reference no: EM133181025

Question 1 - Roy Corp.'s balance sheet indicates that the company has P5M investment in operating assets. During 2021, Roy earned P1.1M of net income on P11M of sales.

Required -

1. Compute Roy's margin for 2021.

2. Compute Roy's turnover for 2021.

3. Compute Roy's ROI for 2021.

4. Re-compute Roy's ROI under each of the following independent assumptions:

a. Sales increase from P5M to PGM and income increases from P1.1 to P1.3M.

b. Sales remain constant, costs and expenses decrease, and income increases by P400k.

c. The amount of investment is decreased by P400k without affecting net income.

Question 2 - Tom Corp. gathered the following data relative to Northern Division's performance:

Net sales P12M

Costs and expenses 11M

 Ave. operating assets 5M

Desired minimum (or imputed) rate Of return established by management 15%

Ave. industry rate of return 28%

Income tax rate 40%

Required - Compute the Northern Division's residual income.

Reference no: EM133181025

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