Consolidated Industries is a diversified manufacturer with business units organized as divisions, including the Reigis Steel...
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Consolidated Industries is a diversified manufacturer with business units organized as divisions, including the Reigis Steel Division. Consolidated monitors its divisions on the basis of both unit contribution and return on investment (ROI), with investment defined as average operating assets employed. All investments in operating assets are expected to earn a minimum return of 11% before income taxes. Reigis's cost of goods sold is considered to be entirely variable; however, its administrative expenses do not depend on volume. Selling expenses are a mixed cost with one-third attributed to sales volume. The 2022 operating statement for Reigis follows. The division's operating assets employed were $181,250,000 at November 30, 2022, unchanged from the year before. REIGIS STEEL DIVISION Operating Statement For the Year Ended November 30, 2022 (000s omitted) Sales revenue Less expenses: Cost of goods sold 50,250 Administrative expenses 10,000 $ 96,000 Consolidated Industries is a diversified manufacturer with business units organized as divisions, including the Reigis Steel Division. Consolidated monitors its divisions on the basis of both unit contribution and return on investment (ROI), with investment defined as average operating assets employed. All investments in operating assets are expected to earn a minimum return of 11% before income taxes. Reigis's cost of goods sold is considered to be entirely variable; however, its administrative expenses do not depend on volume. Selling expenses are a mixed cost with one-third attributed to sales volume. The 2022 operating statement for Reigis follows. The division's operating assets employed were $181,250,000 at November 30, 2022, unchanged from the year before. REIGIS STEEL DIVISION Operating Statement For the Year Ended November 30, 2022 (000s omitted) Sales revenue Less expenses: Cost of goods sold 50,250 Administrative expenses 10,000 $ 96,000
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