The Other Five Divisions Percy Division Total Sales $1,663,000 $100,900 $1,763,900 Cost of goods sold 978,400 76,500 1,054,900 Gross profit 684,600 24,400 709,000 Operating expenses 528,500 49,700 578,200 Net income $156,100 $ (25,300 ) $130,800 In the Percy Division, cost of goods sold is $60,100 variable and $16,400 fixed, and operating expenses are $29,100 variable and $20,600 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Sharon right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
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- Veronica Mars, a recent graduate of Bell’s accounting program, evaluated the operating performance of Dunn Company’s six divisions. Veronica made the following presentation to Dunn’s board of directors and suggested the Percy Division be eliminated. “If the Percy Division is eliminated,” she said, “our total profits would increase by $25,700.” The OtherFive Divisions PercyDivision Total Sales $1,663,000 $100,900 $1,763,900 Cost of goods sold 977,800 76,100 1,053,900 Gross profit 685,200 24,800 710,000 Operating expenses 526,900 50,500 577,400 Net income $158,300 $ (25,700 ) $132,600 In the Percy Division, cost of goods sold is $59,300 variable and $16,800 fixed, and operating expenses are $30,400 variable and $20,100 fixed. None of the Percy Division’s fixed costs will be eliminated if the division is discontinued.Is Veronica right about eliminating the Percy Division? Prepare a schedule to support your…Linda Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Cullumber Company's six divisions. Linda made the following presentation to Cullumber's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $26,100." The Other Percy Division Five Divisions Total Sales $1,663,000 $100,900 $1,763,900 Cost of goods sold 977,300 76,800 1,054,100 Gross profit 685,700 24,100 709,800 Operating expenses 528,400 50,200 578,600 Net income $157,300 $ (26,100 ) $131,200 In the Percy Division, cost of goods sold is $59,500 variable and $17,300 fixed, and operating expenses are $31,000 variable and $19,200 fixed. None of the Percy Division's fixed costs will be eliminated if the division is discontinued. Is Linda right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding the…Veronica Mars, a recent graduate of Bell’s accounting program, evaluated the operating performance of Dunn Company’s six divisions. Veronica made the following presentation to Dunn’s board of directors and suggested the Percy Division be eliminated. “If the Percy Division is eliminated,” she said, “our total profits would increase by $26,900.” The OtherFive Divisions PercyDivision Total Sales $1,665,000 $100,600 $1,765,600 Cost of goods sold 978,700 77,000 1,055,700 Gross profit 686,300 23,600 709,900 Operating expenses 527,200 50,500 577,700 Net income $159,100 $ (26,900 ) $132,200 In the Percy Division, cost of goods sold is $59,200 variable and $17,800 fixed, and operating expenses are $31,600 variable and $18,900 fixed. None of the Percy Division’s fixed costs will be eliminated if the division is discontinued.Is Veronica right about eliminating the Percy Division? Prepare a schedule to support your…
- Veronica Mars, a recent graduate of Bell’s accounting program, evaluated the operating performance of Dunn Company’s six divisions. Veronica made the following presentation to Dunn’s board of directors and suggested the Percy Division be eliminated. “If the Percy Division is eliminated,” she said, “our total profits would increase by $26,200.” The OtherFive Divisions PercyDivision Total Sales $1,663,000 $100,100 $1,763,100 Cost of goods sold 978,600 76,800 1,055,400 Gross profit 684,400 23,300 707,700 Operating expenses 526,000 49,500 575,500 Net income $158,400 $ (26,200 ) $132,200 In the Percy Division, cost of goods sold is $59,300 variable and $17,500 fixed, and operating expenses are $31,400 variable and $18,100 fixed. None of the Percy Division’s fixed costs will be eliminated if the division is discontinued.Is Veronica right about eliminating the Percy Division? Prepare a schedule to support your…Karim Ahmed, a recent graduate of an accounting program, evaluated the operating performance of Lunar Company's four divisions. Karim Ahmed made the following presentation to the Lunar board of directors and suggested the Riffa Division be eliminated. "If the Riffa Division is eliminated," she said, "our total profits would increase by $20,000. The Other Four Riffat Divisions Division Sales $1,600,000 $110,000 Cost of goods sold 950,000 80,000 Gross profit 650,000 30,000 Operating expenses 500,000 50,000 Net income $150,000 ($20,000) In the Riffa Division, cost of goods sold is $65,000 variable and $15,000 fixed, and operating expenses are $40,000 vanable and $10,000 fixed. None of the Riffa Division's feed costs will be eliminated if the division is discontinued. Required: (1) Prepare an incremental analysis to eliminate or keep a division decision Activate Windows (2) Is Karim Ahmed right about eliminating the Riffa Division? Why or why not? WiedeA recent accounting graduate from Divine Word University evaluated the operating performance of Boswell Company's four divisions. The following presentation was made to Boswell's Board of Directors. During the presentation, the accountant made the recommendation to eliminate the Southern Division stating that total net income would increase by P40,000. (See analysis below.) Other Three Divisions Southern Division Total Sales P2,000,000 P480,000 P2,480,000 Cost of Goods Sold 950,000 400,000 1,350,000 Gross Profit…
- The Custodial Division of Clark's Corporate Services (CCS) has assets of $1.2 million. During the past year, the division had profits of $228,000. CCS has a cost of capital of 7.5 percent. Ignore taxes. Required: a. Compute the divisional ROI for the Custodial Division. b. Compute the divisional RI for the Custodial Division. Complete this question by entering your answers in the tabs below. Required A Required B Compute the divisional ROI for the Custodial Division. Divisional ROI % Required A Required B >A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minys sign. Round your percentage answers to nearest whole percent.) Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: Percentage Dollar amount Residual me $ 9,030,000 $ 7,050,000 $ 282,000 $ 3,010,000 19 % 17% Company B $ 10 % 338,400 % C $ 4,545,000 $ 1,818,000 $ % 10 % 90,900Carla Vista, Inc operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. "Survival of the fittest, I say!" was his response when the Weak division's manager, insisted Joseph, that his division earned money for the company. Following is the most recent financial analysis for each division: Weak $125,400 53.900 71.500 35,100 68.600 $(32.200) Sales revenue Variable expenses Contribution margin Direct expenses Allocated expenses Operating income (a) Prepare a revised income statement showing the segment margin for each division V v V V V Average Strong $449,000 $546,900 245,800 300,700 203,200 246,200 79,700 112,700 68.600 68.600 $54,900 $64,900 $ Weak S Average $ Strong $ Total
- The management of Your Corporation is considering dropping a product. Data from the company's accounting system appear below: Sales $40,000 VC $15,000 Fixed manufacturing costs $19,000 Fixed selling and administrative costs $11,000 Investigation has revealed that $11,700 of the fixed manufacturing expenses and $6,300 of the fixed selling and administrative expenses will go away if the product is discontinued. What would be the effect on the company's overall net operating income if this product is dropped? Group of answer choices decrease by $7,000 increase by $7,000 increase by $13,000 decreased by $25,000 decreased by $13,000A family friend has asked your help in analyzing the operations of three anonymous companies operating in the same service sector industry. Supply the missing data in the table below: (Loss amounts should be indicated by a minus sign. Round your percentage answers to nearest whole percent.) Sales Net operating income Average operating assets Return on investment (ROI) Minimum required rate of return: Percentage Dollar amount Residual income A Company B C $ 9,180,000 $ 7,300,000 $ 296,000 $ 4,770,000 $ 3,060,000 $ 1,908,000 13 % 10 % % 11 % $ 355,200 % 16 % EA $ 95,400Hope and Co. is a multi-divisional marketing firm. The performance of divisions is evaluated using financial metrics such as ROI, Residual Income and EVA. For the year ended June 30, 2020, Hope’s CEO received the following information about the performance of the sports marketing division: Sales Revenues $950,000 Operating Income $275,000 Total Assets $1,750,000 Current Liabilities $325,000 Debt (interest rate: 4%) $450,000 Common equity (book value) $550,000 For divisional performance evaluation Hope defined investment as total assets and income as operating income i.e. income before interest and taxes. Hope pays a flat rate of 20% in taxes on income. (a) Based on Hope’s required rate of return of 6% what was the residual income for the 2020 year? (2 decimal places) (b) Hope’s debt trades at book value while its equity has a market value approximately 140% of its book value. The company’s cost of equity capital is 12%. Calculate…