Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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. Required: 1. Calculate Reigis Steel Division's unit contribution if it produced and sold 2,100,000 units during the year ended November 30,2022 . (Round your answer to 2 decimal pleces.) 2. Calculate the following performance measures for 2022 for Reigis: a. Pretax ROI, based on average operating assets employed. (Round your answer to 2 declmal pleces.) b. Residual income (RI). calculated on the basis of average operating assets employed. (Enter your answer In whole dollers, not In thousands.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions