Required: a. Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for the current year after the corporate costs are allocated? b. At the end of the current year, actual corporate costs incurred were $12.0 million. Of the $12.0 million, $7.4 was fixed. Actual results in the two divisions are as follows: Revenues Direct costs Operating profit before allocation Americas $ 62,100,000 49,680,000 $ 12,420,000 ROW $ 93,150,000 66,137,000 $ 27,013,000 What are the operating profits in each division for the current year after the corporate costs are allocated? Complete this question by entering your answers in the tabs below. Required A Required B Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for the current year after the corporate costs are allocated? Note: Do not round intermediate calculations. Enter your answers in thousands of dollars. Revenues Direct costs Operating profit before allocations Corporate costs Operating profit Americas ROW Total

Required: a. Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for the current year after the corporate costs are allocated? b. At the end of the current year, actual corporate costs incurred were $12.0 million. Of the $12.0 million, $7.4 was fixed. Actual results in the two divisions are as follows: Revenues Direct costs Operating profit before allocation Americas $ 62,100,000 49,680,000 $ 12,420,000 ROW $ 93,150,000 66,137,000 $ 27,013,000 What are the operating profits in each division for the current year after the corporate costs are allocated? Complete this question by entering your answers in the tabs below. Required A Required B Suppose corporate overhead is allocated to the two divisions based on relative revenue. What are the budgeted operating profits in each division for the current year after the corporate costs are allocated? Note: Do not round intermediate calculations. Enter your answers in thousands of dollars. Revenues Direct costs Operating profit before allocations Corporate costs Operating profit Americas ROW Total

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 32E: Use the following information for Exercises 11-31 and 11-32: Washington Company has two divisions:...

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Use the following information for Exercises 11-31 and 11-32: Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last years results: Washingtons actual cost of capital was 12%. Exercise 11-32 Residual Income Refer to the information for Washington Company above. In addition, Washington Companys top management has set a minimum acceptable rate of return equal to 8%. Required: 1. Calculate the residual income for the Adams Division. 2. Calculate the residual income for the Jefferson Division.
Service department charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of 64,560, and the Purchasing Department had expenses of 40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: A. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. B. Using the cost driver information in (A), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. C. Why does the Residential Division have a larger support department allocation than the other two divisions, even though its sales are lower?
Allocate 2017 fixed corporate-overhead costs to the three divisions using division margin as the allocation base. What is each division’s operating margin percentage (division margin minus allocated fixed corporate-overhead costs as a percentage of revenues)?
Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $64,560, and the Purchasing Department had expenses of $40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $2,000,000 $3,250,000 $2,900,000 Number of employees: Weekly payroll (52 weeks per year) 400 250 150 Monthly payroll 80 30 10 Number of purchase requisitions per year 7,500 3,000 2,000 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential…
Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $64,560, and the Purchasing Department had expenses of $40,000 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government ContractSales $2,000,000 $3,250,000 $2,900,000 Number of employees:Weekly payroll (52 weeks per year) 400 250 150 Monthly payroll 80 30 10 Number of purchase requisitions per year 7,500 3,000 2,000 (See image for questions)
Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $48,108, and the Purchasing Department had expenses of $25,080 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Line Item Description Residential Commercial Government Contract Sales $524,000 $695,000 $1,595,000 Number of employees: Weekly payroll (52 weeks per year) 115 80 85 Monthly payroll 38 49 36 Number of purchase requisitions per year 2,400 1,700 1,600 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Line Item Description…
Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $34,760, and the Purchasing Department had expenses of $15,660 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Sales Number of employees: Weekly payroll (52 weeks per year) Monthly payroll Number of purchase requisitions per year Number of payroll checks: Weekly payroll x 52 Monthly payroll x 12 Total Residential $ 327,000 Support department allocations: Payroll Department Purchasing Department 175 32 2,300 Total Commercial $ 434,000 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the…
Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $61,284, and the Purchasing Department had expenses of $26,400 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $ 552,000 $ 731,000 $ 1,679,000 Number of employees: Weekly payroll (52 weeks per year) 245 60 65 Monthly payroll 30 41 28 Number of purchase requisitions per year 2,500 1,800 1,700 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Commercial…
Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $41,808, and the Purchasing Department had expenses of $17,690 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial Government Contract Sales $ 370,000 $ 490,000 $ 1,125,000 Number of employees: Weekly payroll (52 weeks per year) 220 75 80 Monthly payroll 36 47 34 Number of purchase requisitions per year 2,600 1,800 1,700 Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential Commercial…
Torres Company accumulates the following summary data for the year ending December 31, 2020, for its Water Division, which it operates as a profit center: sales—$1,935,600 budget, $2,243,000 actual; variable costs—$1,016,200 budget, $1,051,200 actual; and controllable fixed costs—$297,600 budget, $303,400 actual.Prepare a responsibility report for the Water Division for the year ending December 31, 2020. TORRES COMPANYWater DivisionResponsibility ReportFor the Year Ended December 31, 2020 Difference Budget Actual FavorableUnfavorableNeither Favorablenor Unfavorable Select an opening responsibility report item Contribution MarginControllable Fixed CostsControllable MarginFixed CostsGross ProfitNet Income/(Loss)SalesVariable Costs $Enter a dollar amount $Enter a dollar amount $Enter the difference Select an option…
Service Department Charges In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $32,536, and the Purchasing Department had expenses of $14,500 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Residential Commercial GovernmentContract Sales $ 303,000 $ 402,000 $ 922,000 Number of employees: Weekly payroll (52 weeks per year) 125 80 85 Monthly payroll 30 41 28 Number of purchase requisitions per year 2,100 1,500 1,400 a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. Residential…
Required: 1. Compute the ROI for each division. 2. Assume that the company evaluates performance by use of residual income and that the minimum required return for any division is 16%. Compute the residual income for each division.