請RequIred Informatlon(The following information applies to the questions displayed below.]Westerville Company reported the following results from last year's operations:$ 2,300,00eSalesVariable expensesContribution marginFixed expenses0001,630,000Net operating incomeAverage operating assets$ 1,437,500At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenuecharacteristics:SalesContribution margin ratioFixed expenses.00050% of sales$161,000The company's minimum required rate of return is 15%.11. What is last year's residual income?Residual income,< Prev11 12 13of 15Nexto search近

Solution: Target income of last year = average operating assets * minimum required rate of return =…

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Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 21BEB

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Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: At the beginning of last year, Elway had 28,300,000 in operating assets. At the end of the year, Elway had 23,700,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin and turnover ratios for last year. (Note: Round the answer for margin ratio to two decimal places.) 3. Compute ROI. (Note: Round answer to two decimal places.) 4. CONCEPTUAL CONNECTION Briefly explain the meaning of ROI. 5. CONCEPTUAL CONNECTION Comment on why the ROI for Elway Company is relatively high (as compared to the lower ROI of a typical manufacturing company).
i Requlred Informatlon The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: $ 2,300,000 Contribution margin Fixed expenses 1,170,000 Net operating income Average operating assets S1,437,500 At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics: Sales $ 460,000 50% of sales Contribution margin ratio Fixed expenses, $ 161,000 The company's minimum required rate of return is 15%. 8. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.) < Prev Next 15. here to search, 近。 F4 F5 F7 F8 F12 $ & V 4.
Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses $ 1,750, 000 520,000 1, 230, 000 880, 000 Net operating income %24 350, 000 Average operating assets 24 875, 000 At the beginning of this year, the company has a $200,000 investment opportunity with the following cost and revenue characteristics: Sales $ 320, 000 Contribution margin ratio Fixed expenses 60% of sales $ 128, 000 The company's minimum required rate of return is 20%. 4. What is the margin related to this year's investment opportunity? Margin Drov
Required information [The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets ROI At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: Sales $ 1,800,000 435,000 1,365,000 1,005,000 $360,000 $ 1,200,000 $360,000 $ 216,000 The company's minimum required rate of return is 10% Contribution margin ratio Fixed expenses 70 of sales. 6. What is the ROI related to this year's investment opportunity?
Requlred Informetion The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: $ 2,300,000 Variable expenses Contribution margin Fixed expenses 1,170,000 Net operating income 460,000 Average operating assets $ 1,437,500 At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics: Contribution margin ratio Fixed expenses $ 460,000 50% of sales The company's minimum required rate of return is 15%. 12. What is the residual income of this year's investment opportunity? ere to search 近。 F4 F5 F7 Eゴ 8日て」 %23 #3 $ 4. 5. 7.
Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses $ 1,600,000 700,000 900,000 660,000 Net operating income 24 240,000 Average operating assets $1,000,000 At the beginning of this year, the company has a $325,000 investment opportunity with the fol characteristics: $ 520,000 Sales Contribution margin ratio Fixed expenses 70 % of sales $ 312,000 The company's minimum required rate of return is 15%. 4. What is the margin related to this year's investment opportunity? Margin % ( Prev Ps Ai Pr re to search
Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses $ 1,600,000 700,000 900,000 660,000 Net operating income $4 240,000 Average operating assets $ 1,000,000 At the beginning of this year, the company has a $325,000 investment opportunity with the characteristics: Sales Contribution margin ratio Fixed expenses $ 520,000 70 % of sales $ 312,000 The company's minimum required rate of return is 15%. 9. If the company pursues the investment opportunity and otherwise performs the same as last year, wha (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be considered as 12.3%.)) ROI % ( Prev 1O Pr Ps to search RELS
Required information Skip to question [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales $ 1,500,000 Variable expenses 730, 000 Contribution margin 770, 000 Fixed expenses 470,000 Net operating income $ 300,000 Average operating assets $ 937,500 At the beginning of this year, the company has a $362, 500 investment opportunity with the following cost and revenue characteristics: Sales $ 580,000 Contribution margin ratio 70% of sales Fixed expenses $ 319,000 The company's minimum required rate of return is 10%. 8. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.)
Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses $1,600,000 700,000 900,000 660,000 Net operating income 240,000 Average operating assets $ 1,000,000 At the beginning of this year, the company has a $325,000 investment opportunity with the follo characteristics: $ 520,000 Sales Contribution margin ratio Fixed expenses 70 % of sales $ 312,000 The company's minimum required rate of return is 15%. 13. If the company pursues the investment opportunity and otherwise performs the same as last year, what re this year? Residual income < Prev 13 14 1O Pr Ps o search SUS
Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales $ 1,000,000 300,000 Variable expenses Contribution margin Fixed expenses 700,000 500,000 Net operating income $ 200,000 $625,000 Average operating assets At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 200,000 $ 90,000 The company's minimum required rate of return is 15%. Residual income 60% of sales 13. If the company pursues the investment opportunity and otherwise performs the same as last year, what residual income will it earn this year?
LL Required Information The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: $ 2,300,00e 670,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income 000'09 Average operating assets $1,437,500 At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses S0% of sales $ 161,000 The company's minimum required rate of return is 15%. 5. What is the turnover related to this year's investment opportunity? (Round your answer to 1 decimal place.) e here to search 近。 F4 F5 F7 F8 F10 F11 て2 24 4 % 9 08.
[The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets At the beginning of this year, the company has a $162,500 investment opportunity with the following cost and revenue characteristics: Sales $ 1,300,000 440,000 860,000 600,000 $ 260,000 $ 812,500 Contribution margin ratio Fixed expenses $ 260,000 80 % of sales $ 182,000 The company's minimum required rate of return is 15%. 2. What is last year's turnover? Note: Round your answer to 1 decimal place.

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