Reference no: EM131832542

Questions -

1. Basic Segmented Income Statement

Royal Lawncare Company produces and sells two packaged products, Weedban and Greengrow. Revenue and cost information relating to the products follow:

	Product
	Weedban	Greengrow
Selling price per unit	$   6.00	$   7.50
Variable expenses per unit	$   2.40	$   5.25
Traceable fixed expenses per year	$45,000	$21,000

Common fixed expenses in the company total $33,000 annually. Last year the company produced and sold 15,000 units of Weedban and 28,000 units of Greengrow.

Required: Prepare a contribution format income statement segmented by product lines.

2. Compute the Return on Investment

Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below:

Sales	$7,500,000
Net operating income	$600,000
Average operating assets	$5,000,000

Requirement 1: Compute the margin for Alyeska Services Company.

Requirement 2: Compute the turnover for Alyeska Services Company.

Requirement 3: Compute the return on investment (ROI) for Alyeska Services Company.

3. Residual Income

Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of £600,000 on sales of £3,000,000. The company's average operating assets for the year were £2,800,000 and its minimum required rate of return was 18%. (The currency used in England is the pound, denoted by £.)

Required: Compute the company's residual income for the year.