Question
Exhibit 11-2 Manford Inc. has two divisions Refrigerators and Dish Washer. Manford Company Segmented Income Statements For the Current Fiscal Year Ended December 31 Refrigerator
Exhibit 11-2
Manford Inc. has two divisions Refrigerators and Dish Washer.
Manford Company | ||
Segmented Income Statements | ||
For the Current Fiscal Year Ended December 31 | ||
| ||
| Refrigerator | Dish Washer |
| Division | Division |
Sales | $10,000,000 | $5,400,000 |
Cost of goods sold | 4,200,000 | 2,660,000 |
Gross margin | 5,800,000 | 2,740,000 |
Allocated overhead (from corporate) | 940,000 | 740,000 |
Selling and administrative expenses | 780,000 | 360,000 |
Operating income | 4,080,000 | 1,640,000 |
Income tax expense (45%) | 1,836,000 | 738,000 |
Net income | $ 2,244,000 | $ 902,000 |
59. Refer to Exhibit 11-2. Using the segmented income statements, what is the profit margin ratio for the Refrigerator Division (to the nearest hundredth of a percent)?
a. 22.44%
b. 40.80%
c. 58.00%
d. 42.00%
e. None of the answer choices is correct.
60. Refer to Exhibit 11-2. Using the segmented income statements, what is the profit margin ratio for the Dish Washer Division (to the nearest hundredth of a percent)?
a. 30.37%
b. 50.74%
c. 16.70%
d. 49.26%
e. None of the answer choices is correct.
61. Refer to Exhibit 11-2. Assume the Refrigerator Division has average operating assets totaling $24,000,000 for the year. What is the division's return on investment (to the nearest hundredth of a percent)?
a. 40.80%
b. 17.00%
c. 24.17%
d. 58.00%
e. None of the answer choices is correct.
62. Refer to Exhibit 11-2. Assume the Refrigerator Division has average operating assets totaling $24,000,000 for the year and the company's cost of capital rate is 15 percent. What is the residual income for the Refrigerator division?
a. $2,200,000
b. $2,580,000
c. $6,400,000
d. $480,000
e. None of the answer choices is correct.
63. Refer to Exhibit 11-2. Assume the Dish Washer Division has average operating assets totaling $6,560,000 for the year and the company's cost of capital rate is 15 percent. What is the residual income for the Dish Washer division?
a. $656,000
b. $4,744,000
c. $246,000
d. $2,084,000
e. None of the answer choices is correct.
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