Exercise 10-1 Compute the Return on Investment (ROI) [LO10-1] Alyeska Services Company, a division of a major oil company provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below. Sales Net operating income Average operating assets $ 18, see, 200 $ 6, 100, eee $36,000,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) 2 Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your Intermediate calculations and final answer to 2 decimal places.) % 1. Margin 2. Turnover 3. ROI Exercise 10-2 Residual Income [LO10-2] Juniper Design Ltd. of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $440,000 on sales of $1,300,000. The company's average operating assets for the year were $1,500,000 and its minimum required rate of return was 12% Required: Compute the company's residual income for the year. Residual income Exercise 10-3 Measures of Internal Business Process Performance [LO10-3] Management of Mittel Rhein AG of Kln, Germany, would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of operations during the current year the following data were reported: - ok Inspection time wait tine (from order to start of production) Process time Move tine Queue time 2.4 days 15.1 days 3. 3 days 1.2 days 4.2 days T mt Required: 1. Compute the throughput time. (Round your answer to 1 decimal place.) 2. Compute the manufacturing cycle efficiency (MCE) for the quarter (Round your percentage answer to nearest whole percent.) 3. What percentage of the throughput time was spent in non-value-added activities? (Round your percentage answer to nearest whole percent.) 4. Compute the delivery cycle time. (Round your Intermediate calculations and final answer to 1 decimal place.) 5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Round your percentage answer to 1 decimal place.) ances days 96 1. Throughout time 2. Manufacturing cycle efficiency 3. Non-value-added throughout time 4. Delivery cycle time 5. New manufacturing cycle efficiency days % Exercise 10-6 Contrasting Return on Investment (ROI) and Residual Income (LO10-1, LO10-2] Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama, Selected data on the two divisions follow: Sales Net operating income Average operating assets Division Osaka Yokohama $ 10,400,000 $34,000,000 $ 520,000 $2,38e, eee $ 2,600,000 $17,800,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 12% Compute the residual income for each division 3. Is Yokohama's greater amount of residual income an indication that it is better managed? int ences Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 For each division, compute the return on investment (ROI) in terms of margin and turnover Osaka Yokohama RO Required 2 >
