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Exam 11: Segment Reporting,decentralization,and the Balanced Scorecard

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Question 21

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The Northern Division of the Smith Company had average operating assets totaling $150,000 last year.If the minimum required rate of return is 12%,and if last year's net operating income at Northern was $20,000,then the residual income for Northern last year was:

A) $20,000
B) $l8,000
C) $5,000
D) $2,000

E) A) and D)
F) B) and C)

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Question 22

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Ieso Company has two stores: J and K.During November,Ieso Company reported a net operating income of $30,000 and sales of $450,000.The contribution margin in Store J was $100,000,or 40% of sales.The segment margin in Store K was $30,000,or 15% of sales.Traceable fixed expenses are $60,000 in Store J,and $40,000 in Store K. -Ieso Company's total fixed expenses for the year were:

A) $40,000
B) $100,000
C) $140,000
D) $170,000

E) All of the above
F) B) and C)

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Question 23

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Seebach Corporation has two major business segments-Apparel and Accessories.Data concerning those segments for June appear below: Common fixed expenses totaled $292,000 and were allocated as follows: $155,000 to the Apparel business segment and $137,000 to the Accessories business segment. Required: Prepare a segmented income statement in the contribution format for the company.Omit percentages;show only dollar amounts.

The Holmes Division recorded operating data as follows for the past year: -For the past year,the minimum required rate of return was:

The following information is available on Company A: -Company A's return on investment (ROI) is:

Harstin Corporation has provided the following data: -The return on investment for the past year was:

A company had the following results last year: sales,$700,000;return on investment,28%;and margin,8%.The average operating assets last year were:

The Axle Division of LaBate Company makes and sells only one product.Annual data on the Axle Division's single product follow: -If Axle sells 15,000 units per year,the residual income should be:

Which of the following performance measures will decrease if there is an increase in the accounts receivable?

Otterholt Corporation uses residual income to evaluate the performance of its divisions.The minimum required rate of return for performance evaluation purposes is 16%.The Games Division had average operating assets of $470,000 and net operating income of $72,900 in September. Required: What was the Games Division's residual income in September?

The Axle Division of LaBate Company makes and sells only one product.Annual data on the Axle Division's single product follow: -Suppose the manager of Axle desires an annual residual income of $45,000.In order to achieve this,Axle should sell how many units per year?

The West Division of Fitzmaurice Corporation had average operating assets of $450,000 and net operating income of $87,300 in November.The minimum required rate of return for performance evaluation purposes is 18%. -What was the West Division's minimum required return in November?

Deskin Corporation uses residual income to evaluate the performance of its divisions.The company's minimum required rate of return is 19%.In February,the Commercial Products Division had average operating assets of $780,000 and net operating income of $139,800.What was the Commercial Products Division's residual income in February?

Given the following data: Return on investment (ROI) would be:

Licuado Juice Company has four product lines;Orange,Tomato,Carrot,and Grape.Shown below is last year's income statement segmented by product line: Net operating income last year for Licuado Company as a whole was $24,800. -If the Carrot product line would have been dropped at the beginning of last year,how would this have changed the net operating income of Licuado Company as a whole?

The West Division of Fitzmaurice Corporation had average operating assets of $450,000 and net operating income of $87,300 in November.The minimum required rate of return for performance evaluation purposes is 18%. -What was the West Division's residual income in November?

The following information relates to the Cranberry Division of Innovative Bologna Corporation for last year: -What was the Cranberry Division's residual income for last year?

A company that has a profit can increase its return on investment by:

The Holmes Division recorded operating data as follows for the past year: -For the past year,the margin was:

A balanced scorecard is an integrated set of performance measures that should be designed to support management's strategy throughout the organization.