A.

Kenneth Washburn, head of the Sporting Goods Division of Reliable Products, has just completed a miserable nine months. \"If it could have gone wrong, it did. Sales are down, income is down, inventories are bloated, and quite frankly. I'm beginning to worry about myjob,\" he moaned. Washburn is evaluated on the basis of ROI. Selected gures for the past nine months follow. Sales $ 9,999,999 Operating income 633,330 Invested capital 13,333,086 In an effort to make something out of nothing and to salvage the current year's performance, Washburn was contemplating implementation of some or all of the following four strategies: 6. Write off and discard $103,000 of obsolete inventory. The company will take a loss on the disposal. b. Accelerate the collection of $133,000 of overdue customer accounts receivable. c. Stop advertising through yearend and drastically reduce outlays for repairs and maintenance. These actions are expected to save the division $238,000 of expenses and will conserve cash resources. d. Acquire two competitors that are expected to have the following nancial characteristics: Projected Projected Operating Projected Invested Sales Expenses Capital Anderson Manufacturing $4,?63,333 $3,833,333 $91633,333 Palm Beach Enterprises ?,310,006 6,4?3,300 6J753,333 Required: 1-a. Define sales margin, capital turnover, and return on investment. 1-b. Compute sales margin, capital turnover, and return on investment for the Reliable's Sporting Goods Division over the past nine months.Req 1A Req 1B Define sales margin, capital turnover, and return on investment. Sales margin divided by Capital turnover divided by Return on investment divided byCompute sales margin, capital turnover, and return on investment for the Reliable's Sporting Goods Division over the past nine months. [Round your "Sales marginII answer to 1 decimal place (i.e., .1234 should be entered as 12.3) and round your "Capital turnover" answer to 2 decimal places.) Sales margin Capital turnover Return on investment % Kenneth Washburn, head ofthe Sporting Goods Division of Reliable Products, hasjust completed a miserable nine months. \"If it could have gone wrong, it did. Sales are down, income is down, inventories are bloated, and quite frankly. I'm beginning to worry about myjob," he moaned. Washburn is evaluated on the basis of ROI. Selected gures for the past nine months follow. Sales at 9,999,999 Operating income 630,000 Invested capital 10,000,000 In an effort to make something out of nothing and to salvage the current year's performance, Washburn was contemplating implementation of some or all of the following four strategies: 4:. Write off and discard $103,000 of obsolete inventory. The company will take a loss on the disposal. b. Accelerate the collection of $133,000 of overdue customer accounts receivable. c. Stop advertising through yearend and drastically reduce outlays for repairs and maintenance. These actions are expected to save the division $238,000 of expenses and will conserve cash resources. d. Acquire two competitors that are expected to have the following nancial characteristics: Projected Projected Operating Projected Invested Sales Expenses Capital Anderson Manufacturing $4,?60,000 $3,800,000 $9,600,000 Palm Beach Enterprises ?,010,000 6,4?0,000 6,?50,000 4-a. Determine the ROI of the investment in Anderson Manufacturing and do the same for the investment in Palm Beach Enterprises. 4-b. If Washburn wants to maximize ROI, what should the company do?Reg 4A Req 4B Determine the ROI of the investment in Anderson Manufacturing and do the same for the investment in Palm Beach Enterprises. ROI Anderson Manufacturing % Palm Beach Enterprises %Clearview Window Company manufactures windows for the homebuilding industry. The window frames are produced in the Frame Division. The frames are then transferred to the Glass Division, where the glass and hardware are installed. The company's bestselling product is a threebyfourfoot, doublepaned operable window. The Frame Division also can sell frames directly to custom home builders. who install the glass and hardware. The sales price for a frame is $200. The Glass Division sells its nished windows for $470. The markets for both frames and nished windows exhibit perfect competition. The standard variable cost of the window is detailed as follows: Frame Division Glass Division Direct material $ 39 $ 71* Direct labor 4% 39 Variable overhead 71 71 Total $158 $181 *Not including the transfer price for the frame. Required: 1-a. Use the general rule to compute the transfer price for window frames. 1-b. Calculate the transfer price if it is based on standard variable cost with a 10 percent markup. 1-a. Transfer price 1-b. Transfer priceClearview Window Company manufactures windows for the home-building industry. The window frames are produced in the Frame Division. The frames are then transferred to the Glass Division, where the glass and hardware are installed. The company's bestselling product is a threebyfourfoot, doublepaned operable window. The Frame Division also can sell frames directly to custom home builders. who install the glass and hardware. The sales price for a frame is $200. The Glass Division sells its nished windows for $470. The markets for both frames and nished windows exhibit perfect competition. The standard variable cost of the window is detailed as follows: Frame Division Glass Division Direct material $ 39 $ 71* Direct labor 4B 39 Variable overhead 3'1 71 Total $159 $181 *Not including the transfer price for the frame. 2-a. Assume that there is excess capacity in the Frame Division. Use the general rule to compute the transfer price for window frames. 2-c. Suppose the predetermined xedoverhead rate in the Frame Division is 125 percent of directlabor cost. Calculate the transfer price if it is based on standard full cost plus a 10 percent markup. 2-d. The Glass Division has been approached by the US. Army with a special order for 1.900 windows at $381. Assume the transfer price established in requirement 2c. above is being used. i. What is the incremental contribution (loss) per window for Clearview Window Company as a whole if this special order is accepted? ii. From the perspective of Clearview Window Company as a whole, should the special order be accepted or rejected? 2-e. The Glass Division has been approached by the US. Army with a special order for 1,900 windows at $381. Assume the transfer price established in requirement 2c. above is being used. i. What is the incremental contribution (loss) per window for the Glass Division ifthis special order is accepted? ii. Will an autonomous Glass Division manager accept or reject the special order? Req 2A Req 2C Req 2D i Req 2D ii Req 2E i Req 2E ii Assume that there is excess capacity in the Frame Division. Use the general rule to compute the transfer price for window frames. Transfer priceReq 2A Req 2C Reg 2D i Req 2D ii Req 2E i Req 2E ii Suppose the predetermined fixed-overhead rate in the Frame Division is 125 percent of direct-labor cost. Calculate the transfer price if it is based on standard full cost plus a 10 percent markup. Transfer priceReq 2A Req 2C Req 2D i Req 2D ii Req 2E i Req 2E ii The Glass Division has been approached by the U.S. Army with a special order for 1,900 windows at $381. Assume the transfer price established in requirement 2-c. above is being used. What is the incremental contribution (loss) per window for Clearview Window Company as a whole if this special order is accepted? Contribution (loss) per windowReq 2A Req 2C Req 2D i Req 2D ii Req 2E i Req 2E ii The Glass Division has been approached by the U.S. Army with a special order for 1,900 windows at $381. Assume the transfer price established in requirement 2-c. above is being used. From the perspective of Clearview Window Company as a whole, should the special order be accepted or rejected? From the perspective of Clearview Window Company as a whole, should the special order be accepted or rejected? AcceptReq 2A Req 2C Req 2D i Req 2D ii Red 2E i Req 2E ii The Glass Division has been approached by the U.S. Army with a special order for 1,900 windows at $381. Assume the transfer price established in requirement Zc. above is being used. What is the incremental contribution (loss) per window for the Glass Division if this special order is accepted? (Negative amounts should be indicated by a minus sign.} Req 2A Req 2C Req 2D i Req 2D ii Req 2E i Req 2E ii The Glass Division has been approached by the U.S. Army with a special order for 1,900 windows at $381. Assume the transfer price established in requirement 2-c. above is being used. Will an autonomous Glass Division manager accept or reject the special order? Will an autonomous Glass Division manager accept or reject the special order? Reject