Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: $ 190 $ 124 Selling price per circuit board Variable cost per circuit board Number of circuit boards: Produced during the year Sold to outside customers Sold to Division B 20,400 15, 100 5,300 Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic instrument manufactured by that division (one board per instrument). Division B incurred $280 in additional variable cost per instrument and then sold the instruments for $640 each. Required: 1. Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,400 circuit boards. Next year, Division B wants to purchase 6,300 circuit boards from Division A rather than 5,300. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? Konig Enterprises, Limited, owns and operates three restaurants in Vancouver, B.C. The company allocates its fixed administrative expenses to the three restaurants on the basis of sales dollars. Last year the fixed administrative expenses totaled $890,000 and were allocated as follows: Total sales-Last Year Percentage of total sales Allocation (based on the above percentages) Rick's Harborside $ 16,800,000 42% $ 373,800 Restaurants Imperial Garden $ 11,200,000 28% $ 249,200 Ginger Wok $ 12,000,000 30% $ 267,000 Total $ 40,000,000 100% $ 890,000 This year the Imperial Garden restaurant increased its sales by $1 million. The sales levels in the other two restaurants remained unchanged. The company's sales data for this year were as follows: Total sales-This Year Percentage of total sales Restaurants Rick's Harborside Imperial Garden $ 16,800,000 $ 12,200,000 41% 30% Ginger Wok $ 12,000,000 29% Total $ 41,000,000 100% Fixed administrative expenses for this year remained unchanged at $890,000. this year. Required: 1. Using sales dollars as an allocation base, show the allocation of the fixed administrative expenses among the three restaurants for 2. Calculate the change in each restaurant's allocated cost from last year to this year. 3. Is sales dollars a good base for allocation of fixed costs? Posters.com is a small Internet retailer of high-quality posters. The company has $710,000 in operating assets and fixed expenses of $169,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,300,000 per year. The company's contribution margin ratio is 11%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 11 cents. Required: 1. Complete the following table showing the relation between sales and return on investment (ROI). 2. What happens to the company's return on investment (ROI) as sales increase? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table showing the relation between sales and return on investment (ROI). (Round your percentage answers to 2 decimal places.) Net Operating Sales ROI Average Operating Assets Income % $ 359,000 $ $ 29.88 $ $ $ 4,800,000 $ 4,900,000 $ 5,000,000 $ 5,100,000 $ 5,200,000 $ 5,300,000 710,000 710,000 710,000 710,000 710,000 710,000 $ $ $ le