Top Posters
Since Sunday
y
2
m
2
m
2
u
2
m
2
B
2
M
2
e
2
k
2
N
2
y
2
m
2
Home Q & A Board Other Fields Homework Help Business Accounting
New Topic  
SirJohnny SirJohnny
wrote...
Go to Answer
Posts: 133
Rep: 0 0
A year ago
Nobles Corporation provided the following segment margin income statement for two of its divisions: East and West.

​​EastWestTotal
Revenue$510,000$480,000$990,000
Variable expenses​​​
  Product370,000 260,000630,000
  Selling and administrative   80,000    88,000 168,000
Contribution margin60,000 132,000192,000
Less traceable fixed costs   20,000    40,000   60,000
Segment margin$  40,000$  92,000132,000
Common fixed costs​​ 140,000
Net operating income​​($   8,000)

Nobles' actual weighted-average cost of capital is 10% and its tax rate is 30%. The East division balance sheet showed $300,000 of assets ($60,000 current and $240,000 long-term) and $320,000 of liabilities ($120,000 current and $200,000 long-term). The West division reported $360,000 of assets ($80,000 current and $280,000 long-term) and $260,000 of liabilities ($60,000 current and $200,000 long-term).

Required:

a.Calculate the economic value added for each division.
b.Which of the two managers will be rated higher on performance? Why?
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
Author:
Read 111 times
1 Reply
Replies
Answer verified by a subject expert
fnc28304fnc28304
wrote...
#1
Posts: 142
Rep: 0 0
A year ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

SirJohnny Author
wrote...

A year ago
Good timing, thanks!
prime7105
wrote...

Yesterday
Brilliant ツ
africa143
wrote...

2 hours ago
Thanks for your help!!
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  605 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 292
  
 17334
  
 262
Your Opinion
Which industry do you think artificial intelligence (AI) will impact the most?
Votes: 486
Previous poll results: Which country would you like to visit for its food?