A condensed income statement for the commercial division of Maxell Manufacturing Inc. for the year ended December 31, 20Y9

A condensed income statement for the commercial division of Maxell Manufacturing Inc. for the year ended December 31, 20Y9

r condensed income statement for the Commencial Division of Maxell Manufacturing inc. for the year ended December 31, 20Y9, is as foiows 5.850 00000 Sales 420 00000 Cost of goods sold 1,450,000 Gross proft 045.000 00 Operating espen 85,00000 Income from operations 2,750 000 00 Invested aset f he m on 82,780,000 inetmert ube increased to at least 1800% by e e h has indicated that the dvision's re Assume Bhat the Commercial Division received no charges om service departments The presisent of Maxel Manufachring next year it operations are to conue The dvision manager is conaiderning the foowing tivee proposals t no sain or koss and ease smlar eclmt The arl ease ements moud The president of Maxe. Ma tact ing has id ated that te dwsion's reur 2 75.000 nesmert matbeincreased to at lease 1800% by Po end of the Asame that the Comm erial Dison teceived no dargestom service deprime es on. mext year i operations are to continue. The division manager is considering the tollowing three proposals: Proposal 1: Transfer equipment with a book value of $313,000 to other divisions altl no gain or loss and lease similar equipment The annual lease payments would exceed the amount of depreciation expense on the old equioment by $108,000 Ths increase in expense wouild be included as part of the cost of goods sold Sales would remain unchanged gment weich has norenaing book vakie, wod be scrapped a, no gar, or loss The new eammentand ncrease invested assets by an adana smsa00 br-year. Proposal 3:Reduce invested assets by disooninuing a product line. This action wouid eliminale sales of $593,000 reduce cost of goods sold by 5410,700, and reduce operaing espenses by $175.500 Assets of $1.378.000 would be transtemed to other divisions at no gain or los Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for the Commercial Division for the past year. If required, round your answers to one decimal place. 1. Commercial Division 11.37% Profit margin Investment turnover ROI dep 1 $1 Estimated Income Statements 2. Prepare condensed estimated income statements and compute the invested assets for each proposal. Maxell Manufacturing Inc.-Commercial Division Estimated Income Statements For the Year Ended December 31, 20Y9 Proposal 1 Proposal 2 Proposal 3 3850,000.00 $3,850,000.00 2 Sales Cost of goods sold 3 4 Gross proft 5 Operating expenses Income from operations Invested assets 7 n investment nove, and return on investment lor each proposal if equ red round your nte medate a d firar answers to two or return on investment, determine the pro t mar 3. Using the ont formula u decimal places Investment Turnover Profit Margin Proposal 1 Proposal 2 Proposal 3 le, 4 which of te three proposals would meet the required 18.00% return on investment? Check al that apply ment b sti Proposal 3 change Proposal1 Proposal 2 5. Itf the Commercial Division were in an industry where the profit margin could not be increased, how much would the investment turnover have to increase to meet the president's required 18.00% retum on investment? Enter your increase in investment tumover answer as a percentage of current investment turnover. If required, round your intermediate and Sinal answers to two decimal places /takeAssignment/takeAssignmentMain.do?invoker assignments&takeAssignme Calculator Effect of proposals on divisional performance Final instructions Starting Question Estimated Income Statements Instructions A condensed income statement for the Commercial Division of Maxell Manufacturing Inc. for the $3,850,000.00 1 Sales 2420,000.00 2Cost of goods sold 1,430,000.00 3 Gross profit 1,045,000.00 Operating expenses 385,000.00 5 Income from operations 2,750,000.00 6 Invested assets Assume that the Commercial Division received no charges from service departments. The president of Maxell Manufacturing has indicated that the division's return on a $2,750,000 investment must be increased to at least 18.00% by the end of the next year if operations are to continue. The division manager is considering the following three proposals: Proposal 1: Transfer equipment with a book value of $313,000 to other divisions at no gain or loss and lease similar equipment. The annual lease payments would exceed the amount of depreciation expense on the old equipment by $108,000. This increase in expense would be included as part of the cost of goods sold. Sales would remain unchanged. Proposal 2: Purchase new and more efficient machining equipment and thereby reduce the cost of goods sold by $530,000 after considering the effects of depreciation expense on the new equipment. Sales would remain unchanged, and the old equipment, which has no remaining book value, would be scrapped at no gain or loss. The new equipment would increase invested assets by an additional $1,815,000 for the year Proposal 3: Reduce invested assets by discontinuing a product line. This action would eliminate sales of $593,000, reduce cost of goods sold by $410,700, and reduce operating expenses by $175,500. Assets of $1,378,000 would be transferred to other divisions at no gain or loss. stimated Income Statements Prepare condensed estimated income statements and compute the invested assets for each proposal. Maxell Manufacturing Inc.-Commercial Division Estimated Income Statements For the Year Ended December 31, 20Y9 Proposal 1 Proposal 2 Proposal 3 Sales $3,850,000.00 $3,850,000.00 Cost of goods sold Gross profit Operating expenses Income from operations Invested assets Instructions Starting Question Estimated Income Statements Final Questi Instructions Estimated Income Statements Final Questions 3. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, a return on investment for each proposal. If required, round your intermediate and final answers to two dec places. Profit Margin Investment Turnover ROI Proposal 1 Proposal 2 Proposal 3 4. Which of the three proposals would meet the required 18.00% return on investment? Check all that app Proposal 3 O Proposal 1 Proposal 2 5. If the Commercial Division were in an industry where the profit margin could not be increased, how muc would the investment turnover have to increase to meet the president's required 18.00% return on investment? Enter your increase in investment turnover answer as a percentage of current investment turnover. If required, round your intermediate and final answers to two decimal places. eck My Work 4 more Check My Work uses remaining. ent Score: 58.47% r condensed income statement for the Commencial Division of Maxell Manufacturing inc. for the year ended December 31, 20Y9, is as foiows 5.850 00000 Sales 420 00000 Cost of goods sold 1,450,000 Gross proft 045.000 00 Operating espen 85,00000 Income from operations 2,750 000 00 Invested aset f he m on 82,780,000 inetmert ube increased to at least 1800% by e e h has indicated that the dvision's re Assume Bhat the Commercial Division received no charges om service departments The presisent of Maxel Manufachring next year it operations are to conue The dvision manager is conaiderning the foowing tivee proposals t no sain or koss and ease smlar eclmt The arl ease ements moud The president of Maxe. Ma tact ing has id ated that te dwsion's reur 2 75.000 nesmert matbeincreased to at lease 1800% by Po end of the Asame that the Comm erial Dison teceived no dargestom service deprime es on. mext year i operations are to continue. The division manager is considering the tollowing three proposals: Proposal 1: Transfer equipment with a book value of $313,000 to other divisions altl no gain or loss and lease similar equipment The annual lease payments would exceed the amount of depreciation expense on the old equioment by $108,000 Ths increase in expense wouild be included as part of the cost of goods sold Sales would remain unchanged gment weich has norenaing book vakie, wod be scrapped a, no gar, or loss The new eammentand ncrease invested assets by an adana smsa00 br-year. Proposal 3:Reduce invested assets by disooninuing a product line. This action wouid eliminale sales of $593,000 reduce cost of goods sold by 5410,700, and reduce operaing espenses by $175.500 Assets of $1.378.000 would be transtemed to other divisions at no gain or los Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for the Commercial Division for the past year. If required, round your answers to one decimal place. 1. Commercial Division 11.37% Profit margin Investment turnover ROI dep 1 $1 Estimated Income Statements 2. Prepare condensed estimated income statements and compute the invested assets for each proposal. Maxell Manufacturing Inc.-Commercial Division Estimated Income Statements For the Year Ended December 31, 20Y9 Proposal 1 Proposal 2 Proposal 3 3850,000.00 $3,850,000.00 2 Sales Cost of goods sold 3 4 Gross proft 5 Operating expenses Income from operations Invested assets 7 n investment nove, and return on investment lor each proposal if equ red round your nte medate a d firar answers to two or return on investment, determine the pro t mar 3. Using the ont formula u decimal places Investment Turnover Profit Margin Proposal 1 Proposal 2 Proposal 3 le, 4 which of te three proposals would meet the required 18.00% return on investment? Check al that apply ment b sti Proposal 3 change Proposal1 Proposal 2 5. Itf the Commercial Division were in an industry where the profit margin could not be increased, how much would the investment turnover have to increase to meet the president's required 18.00% retum on investment? Enter your increase in investment tumover answer as a percentage of current investment turnover. If required, round your intermediate and Sinal answers to two decimal places /takeAssignment/takeAssignmentMain.do?invoker assignments&takeAssignme Calculator Effect of proposals on divisional performance Final instructions Starting Question Estimated Income Statements Instructions A condensed income statement for the Commercial Division of Maxell Manufacturing Inc. for the $3,850,000.00 1 Sales 2420,000.00 2Cost of goods sold 1,430,000.00 3 Gross profit 1,045,000.00 Operating expenses 385,000.00 5 Income from operations 2,750,000.00 6 Invested assets Assume that the Commercial Division received no charges from service departments. The president of Maxell Manufacturing has indicated that the division's return on a $2,750,000 investment must be increased to at least 18.00% by the end of the next year if operations are to continue. The division manager is considering the following three proposals: Proposal 1: Transfer equipment with a book value of $313,000 to other divisions at no gain or loss and lease similar equipment. The annual lease payments would exceed the amount of depreciation expense on the old equipment by $108,000. This increase in expense would be included as part of the cost of goods sold. Sales would remain unchanged. Proposal 2: Purchase new and more efficient machining equipment and thereby reduce the cost of goods sold by $530,000 after considering the effects of depreciation expense on the new equipment. Sales would remain unchanged, and the old equipment, which has no remaining book value, would be scrapped at no gain or loss. The new equipment would increase invested assets by an additional $1,815,000 for the year Proposal 3: Reduce invested assets by discontinuing a product line. This action would eliminate sales of $593,000, reduce cost of goods sold by $410,700, and reduce operating expenses by $175,500. Assets of $1,378,000 would be transferred to other divisions at no gain or loss. stimated Income Statements Prepare condensed estimated income statements and compute the invested assets for each proposal. Maxell Manufacturing Inc.-Commercial Division Estimated Income Statements For the Year Ended December 31, 20Y9 Proposal 1 Proposal 2 Proposal 3 Sales $3,850,000.00 $3,850,000.00 Cost of goods sold Gross profit Operating expenses Income from operations Invested assets Instructions Starting Question Estimated Income Statements Final Questi Instructions Estimated Income Statements Final Questions 3. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, a return on investment for each proposal. If required, round your intermediate and final answers to two dec places. Profit Margin Investment Turnover ROI Proposal 1 Proposal 2 Proposal 3 4. Which of the three proposals would meet the required 18.00% return on investment? Check all that app Proposal 3 O Proposal 1 Proposal 2 5. If the Commercial Division were in an industry where the profit margin could not be increased, how muc would the investment turnover have to increase to meet the president's required 18.00% return on investment? Enter your increase in investment turnover answer as a percentage of current investment turnover. If required, round your intermediate and final answers to two decimal places. eck My Work 4 more Check My Work uses remaining. ent Score: 58.47%