Question
8) Batman Abstract Company has three divisions that operate autonomously. Their results for the current year were as follows: Riddler Joker Penguin Sales $5,000,000 $7,000,000
8) Batman Abstract Company has three divisions that operate autonomously. Their results for the current year were as follows:
|
| Riddler | Joker | Penguin |
| Sales | $5,000,000 | $7,000,000 | $10,000,000 |
| Contribution margin | 1,440,000 | 1,700,000 | 3,500,000 |
| Operating income | 1,000,000 | 1,750,000 | 2,520,000 |
| Investment base | 9,000,000 | 10,000,000 | 14,000,000 |
The company's desired rate of return is 20%.
Required: (5)
a. Compute each division's ROI.
b. Compute each division's residual income.
c. Rank each division by ROI
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Managerial Accounting Tools For Business Decision Making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Ibrahim M. Aly, Donald E. Kieso
6th Canadian Edition
1119731828, 9781119731825
