Question : 181. Using the data from the Koko Company, (a) determine the divisional income : 1233905

 

181. Using the data from the Koko Company,

(a)

determine the divisional income from operations for the three regions by allocating the service department expenses proportional to the sales of the regions.

(b)

determine the increase or decrease to net income if C Region did not operate.

 

 

 

 

A Region

B Region

C Region

Sales

$600,000

$900,000

$300,000

Cost of goods sold

200,000

350,000

190,000

Selling expenses

150,000

275,000

100,000

 

 

 

 

Service department expenses

 

 

 

        Purchasing

 

 

120,000

        Payroll accounting

 

 

80,000

 

 

 

 

 

182. Casey Co. has two divisions, F and G. Invested assets and condensed income statement data for each division for the past year ended December 31 are as follows: 

 

Division F

Division G

Revenues

$175,000

$112,500

Operating expenses

112,500

92,750

Service department charges

27,500

12,625

Invested assets

225,000

97,500

 

 

 

 

(a)

Prepare condensed income statements for the past year for each division.

(b)

Using the expanded expression, determine the profit margin, investment turnover, and rate of return on investment for each division.

 

 

 

183. Data for Divisions R, S, T, U, and V are as follows: 

Div.

Sales

Income fromOperations

Inv.Assets

Rate ofReturnon Inv.

ProfitMargin

Invest.Turnover

R

(1)

$35,000

$200,000

(2)

(3)

1.6

S

$455,000

(4)

$284,375

16%

(5)

(6)

T

$525,000

$73,500

(7)

(8)

(9)

1.2

U

$800,000

(10)

(11)

(12)

13.0%

2.5

V

(13)

(14)

$250,000

(15)

16.0%

2.0

 

 

 

 

 

 

 

 

(a)

Determine the missing items, identifying each by number.

(b)

Which division is most profitable in terms of income from operations?

(c)

Which division is most profitable in terms of rate of return on investment?

 

 

 

184. Several items are missing from the following table of rate of return on investment and residual income. Determine the missing items, identifying each item by the appropriate letter. 

InvestedAssets

IncomefromOper.

Rate ofReturnon Inv.

Min.Rate ofReturn

Min. Amt.of IncomefromOper.

ResidualIncome

(a)

(b)

(c)

16%

$128,000

$10,000

$850,000

$153,000

(d)

12%

(e)

(f)

$825,000

(g)

20%

(h)

(i)

$24,000

(j)

$129,000

24%

(k)

$  60,000

(l)

 

 

 

 

 

 

 

185. The sales, income from operations, and invested assets for each division of Jamieson Company are as follows: 

 

Sales

Income fromOperations

InvestedAssets

Division E

$4,000,000

$550,000

$2,400,000

Division F

4,800,000

760,000

2,500,000

Division G

7,000,000

860,000

2,800,000

 

 

 

 

 

(a)

Using the expanded expression, determine the profit margin, investment turnover, and rate of return on investment for each division. Round to one decimal place.

(b)

Which is (are) the most profitable per dollar invested?