When organizations choose to decentralize their operations, divisions may end up exchanging goods ...
[html]When organizations choose to decentralize their operations, divisions may end up exchanging goods and services with one another rather than with external suppliers or customer. Since managers are evaluated based on how well their divisions perf
A disadvantage of evaluating managers' performance based on ROI is that it can lead to undesirable ...
[html]A disadvantage of evaluating managers' performance based on ROI is that it can lead to undesirable managerial actions. Residual income can overcome many of the problems of ROI.
You are assigned to a team responsible for evaluating segment managers' performance measures. A ...
[html]You are assigned to a team responsible for evaluating segment managers' performance measures. A team member has indicated that a friend who is a manager at a competitor's company is evaluated using "ROI," but does not know what "ROI" is.
A segment of an organization is any part of the organization that management wishes to evaluate. ...
[html]A segment of an organization is any part of the organization that management wishes to evaluate. Segment margin income statements highlight the elements under the segment manager's control.
When a small business begins, it is generally simple for the owner or manager to stay on top of ...
[html]When a small business begins, it is generally simple for the owner or manager to stay on top of everything going on in the business. However, as the business adds more product lines and locations. and hires more employees, it becomes more and m
The DuPont Model decomposes the original ROI formula into two components to show the different ...
The DuPont Model decomposes the original ROI formula into two components to show the different choices managers have to improve ROI. What are the terms for the two components and how do you calculate the ratios?
Before a company makes the decision to change the degree of decentralization, top management must ...
[html]Before a company makes the decision to change the degree of decentralization, top management must consider the advantages and disadvantages of such a move.
Gil Jargon Corporation produces lawn mowers. The Battery division makes a battery that the Electric ...
[html]Gil Jargon Corporation produces lawn mowers. The Battery division makes a battery that the Electric Motor division needs for a new product. The Battery division's variable cost of manufacturing the battery is $16 per unit. The battery is also a
The Machining division makes a component part that the Assembly division needs for a new product. ...
[html]The Machining division makes a component part that the Assembly division needs for a new product. The Machining division's variable cost of manufacturing the component is $25 per unit. The component is also available on the open market at a pri
Gooding Custom Design generated $320,000 in operating income on sales revenue of $2,500,000. The ...
[html]Gooding Custom Design generated $320,000 in operating income on sales revenue of $2,500,000. The company had $3,000,000 in assets on January 1 and $3,250,000 in assets on December 31.
Brooke Bundi, president of the Seco Corporation, has mandated a minimum 10% return on investment for ...
[html]Brooke Bundi, president of the Seco Corporation, has mandated a minimum 10% return on investment for any project undertaken by the company. Given the company's decentralization, Brooke leaves all investment decisions to the divisional managers
Jackson Brothers Instruments sells stringed instruments. Trent Jackson, the company's president, ...
[html]Jackson Brothers Instruments sells stringed instruments. Trent Jackson, the company's president, just received the following income statement reporting the results of the past year.
The Assembly Division of Mounds Corporation makes a component part that the Packaging Division needs ...
[html]The Assembly Division of Mounds Corporation makes a component part that the Packaging Division needs to purchase. The Assembly Division's variable cost of manufacturing the component is $25 per unit. The component is also available on the open
The Transformer division of Lorman Industries produces transformers that can be sold to outside ...
[html]The Transformer division of Lorman Industries produces transformers that can be sold to outside customers or transferred to the Electronics division of the company. The following information has been collected by Lorman's controller:
Springer Company produces and sells home-ground wheat flour. The flour mill division sells to the ...
[html]Springer Company produces and sells home-ground wheat flour. The flour mill division sells to the general public in its outlet store located at the mill. The mill division also is the supplier of flour for its bakery division located across the
University Hospital provided the following segment margin income statements for two of its ...
[html]University Hospital provided the following segment margin income statements for two of its divisions: Diagnostic and Outpatient. Both divisions are structured as investment centers.
Major Corporation operates a wholesale electrical supply company with two locations. Each location ...
[html]Major Corporation operates a wholesale electrical supply company with two locations. Each location is evaluated as an investment center. Selected results from the latest year are as follows:
Bethlehem Corporation had $1,000,000 in sales which resulted in operating income of $62,000. On ...
[html]Bethlehem Corporation had $1,000,000 in sales which resulted in operating income of $62,000. On January 1, Bethlehem reported $920,000 in assets. Because of a downturn in the economy, Bethlehem sold several assets during the year. Its December
In a decentralized organization, upper managers need a way to evaluate the performance of unit ...
[html]In a decentralized organization, upper managers need a way to evaluate the performance of unit managers. Based on factors under the unit manager's control, organizational units are categorized as cost centers, profit centers, or investment cent
In a decentralized organization, upper managers need a way to evaluate the performance of unit ...
[html]In a decentralized organization, upper managers need a way to evaluate the performance of unit managers. Based on factors under the unit manager's control, organizational units are categorized as cost centers, profit centers, or investment cent
An organization may be structured as a centralized or decentralized decision-making environment. ...
[html]An organization may be structured as a centralized or decentralized decision-making environment. Classify each of the following as a characteristic of a centralized or decentralized decision-making environment by placing an "X" in the appropria
Lakeside Industries' operates as a decentralized organization. Its tent division manufactures small ...
[html]Lakeside Industries' operates as a decentralized organization. Its tent division manufactures small camping tents. The fabricating division manufactures one component needed by the tent division. The tent division has been purchasing the compon
Lakeside Industries' operates as a decentralized organization. Its fishing gear division ...
[html]Lakeside Industries' operates as a decentralized organization. Its fishing gear division manufactures fishing lures. The fiberglass division manufactures one component needed by the fishing gear division. The fishing gear division has been purc
Burton Corporation's Central region operates an investment center. John Meadows, the region's ...
[html]Burton Corporation's Central region operates an investment center. John Meadows, the region's director, has set a 15% required minimum rate of return. John is considering investing in a $50,000 machine that is expected to generate $20,000 in ad
Marshall Industries operates as an investment center. Buddy Hall, the region's division manager, ...
[html]Marshall Industries operates as an investment center. Buddy Hall, the region's division manager, has set a required minimum rate of return of 15%. Marshall's total assets are $350,000, current liabilities are $150,000, and operating income is $
Marshall Industries has sales of $600,000 and net operating income of $30,000. Marshall's average ...
Marshall Industries has sales of $600,000 and net operating income of $30,000. Marshall's average operating assets total $200,000. Use the Dupont model to calculate the company's return on investment.
