User Account

All Pages

Compute the residue income

Assignment Help Managerial Accounting
Reference no: EM132965760

Question - Sam's Corporation has a division operating in Macau, and Sam sets the target rate of return of 25% for 2020. In the year of 2020, Macau Division generated $30,000,000 of revenue on average assets of $18,000,000. The division's variable costs were 60% of sales revenue and the fixed expenses were $4,500,000. In the year of 2021, Sam expects an increase in sales of I 5% and an increase of $1,000,000 in rent expense due to the renewal of shop's rental contract for the next five years. The average assets would have 12% increases on every 15% increase in sales. Sam is thinking to motivate the management of Macau Division, Sam is considering two bonus plans: Plan A is based on ROI (return on investment) with the formula of: (ROI- Target Rate) X $1,000,000; Plan Bis based on RI (residue income) with formula of RIX 0.05.

Instructions -

a. Compute the return on investment of 2020, and 2021.

b. Compute the residue income of 2020, and 2021.

c. Compute the bonus of both bonus plans (A&B) in 2020 and 2021.

d. Which plan (Plan A or Plan B) do you suggest to managers?

Reference no: EM132965760

Questions Cloud

Cost of restricting foreign direct investment : What is the cost of restricting foreign direct investment?
International business development in eastern europe : 1. Compare and contrast international business development in Eastern Europe and Western Europe.
Planning and executing change effectively : Reflect on the section Planning and Executing Change Effectively, in Chapter 7 of the text. Summarize the key steps in planning and executing the change.
Define the main forms of pollution and resource depletion : Define the main forms of pollution and resource depletion and identify the major problems associated with each form.
Compute the residue income : Macau Division generated $30,000,000 of revenue on average assets of $18,000,000. Compute the residue income of 2020, and 2021
Do you think hostile takeovers are unethical : Do you think hostile takeovers are unethical? Why or why not?
Explain five compliance management processes : Explain any three methods for clarifying the validity of information you gather for a compliance related research project.
Develop an efe and cpm matrix for an airline : 1. Develop an EFE and CPM Matrix for an Airline company PAL Steps
Discuss the negative impact of the current pandemic : Please discuss the negative impact of the current pandemic on the trade and commercial activities of a firm. Further, what can you recommend to mitigate these n

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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