Cummings Corp. has three business segmentsthe Plumbing Parts division, Small Tools division, and Design Printing division. Carol Jenkins (Cummings' CFO) and William Samuels (head of Production) would like to analyze the performance of each division using financial and nonfinancial measures. Using the information contained in the exhibits, complete the sections below. The information in the Analytics Definitions exhibit must be used for all financial ratio calculations. PART I: For the Plumbing Parts division, calculate the partial productivity ratio (PPR) for iron material used and the total factor productivity (TFP) ratio for all raw materials used to produce the division's plumbing pipes and elbows during August. Insert answers in table below. 1 Partial productivity ratio (for iron) 2 Total factor productivity ratio (for all raw materials) 1 A PART II: For Small Tools division, determine the dollar or percentage variance each financial scorecard category, inserting the variance as a positive amount in the table below. Also, indicate whether each SBU (revenue, cost, profit, investment) underperformed or overperformed on the head of Production's financial scorecard, based on the results of the variance analysis. Category Financial Scorecard Variance ($ or % as Applicable) 2 Total revenue 3 Total costs A 4 Net income 5 Return on assets B C SBU B 123 Revenue SBU 123 Cost SBU 123 Profit SBU 123 Investment SBU 123 123 D Overperformed or Underperformed? # PART III: For the Design Printing division, calculate the economic value added of the new investment and insert the correct answer in the table provided below. Economic value added 123 Memo: August Production Data Memo: August Production Data Memo To: All Cummings Corp. From: James Blake, manager-Plumbing Parts division Date: September 20, Year 3 Re: August production data and future forecasts Here are the price and usage results from August for our Plumbing Parts division: Price of iron purchased Price of copper purchased Number of pipes/elbows produced Pounds of copper used Pounds of iron used $6.10/lb. $9.60/lb. 12,000 units 750 lbs. 4,800 lbs. As you know, our division manufactures specialized pipes and elbows primarily for industrial/institutional facilities. The raw materials used for these related products are iron and copper, with iron the primary production input. Over the last few months, we have negotiated price reductions from our suppliers and expect per-pound prices for iron and copper to fall by 10 cents and 15 cents, respectively. These price reductions should begin to take effect next month. E-mail Financial Data Small Tools Div. E-mail Financial Data Small Tools Division Tuesday, September 18, Year 3 10:26 a.m. Abrams, Shane (manager, Small Tools division-Cummings Corp.) Small Tools divisionFinancial data quarter ended 8.31 Samuels, William (head of Production-Cummings Corp.) To: Hi Will, Please see the screen shot below, which reflects the quarterly performance for Small Tools-actuals to budget. Small Tools Division (Dollars in thousands) S.A. Revenue Consumer sales Industrial sales Production costs Raw materials Direct labor Manufacturing overhead Scrap (unsold) Other costs Management salaries Promotional Net income Assets Actual 3 Months Ended 8/31 $ 34,785 $ 99,663 32,268 64,224 12,900 500 2,500 300 21,756 Budget 3 Months Ended 8/31 198,975 33,000 102,250 As always, if you have any questions, please do not hesitate to call me. 31,108 66,949 13,500 2,500 426 20,767 188,400 Excerpt From Production Manager Meeting Excerpt From Production Manager Meeting Production meeting: September 17, Year 3 Attendees: Carol Jenkins, William Samuels, James Blake, Shane Abrams, Kelly Blanton First presenter is Kelly Blanton, manager for the Design Printing division. Notes from Kelly's presentation At the beginning of the fiscal year, they purchased a state-of-the art printing machine. Information regarding this purchase and other financial data for the 12 months ending on August 31 of the current year: Cost of printing machine Cost of capital Net operating profit Net income axes $850,000 9 percent $125,000 $100,000 Per Kelly, they are also considering several other capital equipment purchases that will likely occur in October or November. The expected cost for these total approximately $1.2 million.