Question
Company ABC has a TV division and a PC division. The following information relates to last year's operations at each division. The minimum required rate
Company ABC has a TV division and a PC division. The following information relates to last year's operations at each division. The minimum required rate of return is the same for both divisions.
| TV | PC |
Sales | $10,000 | (d) |
Average operating assets | $20,000 | (e) |
Net operating income | (a) | $10,000 |
Residual Income | $3,000 | (f) |
Margin | (b) | 5% |
Turnover | (c) | 2 |
Return on Investment (ROI) | 20% | (g) |
Company ABC tracks the time of processing orders. The average times were recorded as follows:
Queue Time | 3 hours |
Inspection Time | 2 hours |
Process Time | (h) |
Move Time | 3 hours |
Wait Time | 5 hours |
Manufacturing Cycle Efficiency | 0.5 |
Delivery Cycle Time | (i) |
Value-added Time | (j) |
Compute the unknown quantities above [(a) through (j)]. SHOW YOUR COMPUTATIONS. (10 marks)
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