Johnson company has three operating segments the managers

Assignment Help Accounting Basics

Reference no: EM13589170

Johnson Company has three operating segments. The managers of each segment have decision-making authority regarding pricing, cost control and asset investment. The following information is available for the three segments for the third quarter of 2014:

	Alpha	Beta	Delta
Revenues	$790,000	$1,245,000	$990,000
Operating Expenses	$560,000	$960,000	$700,000
Invested Assets	$1,600,000	$2,000,000	$2,080,000
Number of Transactions	120,000	150,000	130,000
Desired Minimum ROI	12.0%	12.0%	12.0%

The company has a centralized accounting system. For financial reporting purposes, accounting department costs and common corporate costs are allocated to the segments as follows:

Accounting Department (number of transactions)	$60,000
Corporate Headquarters' Costs (per revenue dollar)	$810,000

REQUIRED:

Part 1: Prepare a report showing the operating incomes of the three segments for performance evaluate purposes.

Part 2: Identify the most successful segment according to each of the following measurements: (Show supporting calculations.)

Segment profit margin
Segment return on investment
Segment residual income

Part 3: Which of the measurements in Part 2 would you recommend for comparing the performance of the segments? Why?

Reference no: EM13589170

Questions Cloud

Springtime paints makes quality paint in one production : springtime paints makes quality paint in one production department. production begins with the blending of various

Assume that tracy company uses a periodic inventory system : assume that tracy company uses a periodic inventory system and has these account balances purchases 440600 purchase

Find the frequency of the radio station and the wavelengths : question a resonant circuit in a radio receiver is tuned to a certain station when the inductor has a value of .250 h

On 1st april 2010 johny purchased five machines for 60000 : on 1st april 2010 johny purchased five machines for 60000 each. depreciation 10 p.a. on initial cost has been charged

Johnson company has three operating segments the managers : johnson company has three operating segments. the managers of each segment have decision-making authority regarding

Using the information following information what amount is : using the information following information what amount is the check net of all deductions that stanley received for

A rod rests on frictionless ice forces that are equal in : question a rod rests on frictionless ice. forces that are equal in magnitude and opposite in direction are

Zach taylor is settling a 30000 loan due today by making 6 : zach taylor is settling a 30000 loan due today by making 6 equal annual payments of 7091.29.what payments must zach

Determine the direct labor rate variance direct labor time : eastern polymers inc. processes a base chemical into plastic. standard costs and actual costs for direct materials

User Account

All Pages