Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Fill out the white blank at the end of this sentence in Requirement 5 The Consumer Division should work on improving its... Requirement 5. Calculate

image text in transcribed

Fill out the white blank at the end of this sentence in Requirement 5 "The Consumer Division should work on improving its..." Requirement 5. Calculate each division's Ri. Interpret your results and offer recommendations for any division with negative RI. capital turnover rate customer service First enter the formula, then calculate the RI for each division (Enter the amount in thousands. Use parentheses or a minus sign for neg Operating income Total assets X Target rate of return) RI Paint Stores $ 465,600 - $ 1,552,000 X 23 %) = $ 108,640 Consumer $ 221,000 - $ 2,600,000 X 23 %) = $(377.000) ROI sales Interpret your results and offer recommendations for any division with negative RI. total assets Only the Paint Stores Division is meeting management's target rate of return. The Consumer Division should work on improving its ROI . Improving this may help the division achieve positive residual income. The company is segmented into five divisions: Paint Stores (branded retail location), Consumer (paint sold through stores such as Sears, Home Depot, and Lowe's), Automotive (sales to auto manufacturers), International, and Administration. The following is selected hypothetical divisional information for the company's two largest divisions: Paint Stores and Consumer (in thousands of dollars). Sales Operating Income Paint Stores ..$ 3,880,000 $ 465,600 Consumer .... $ 1,300,000 $ 221,000 Total Assets $1,552,000 $2,600,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Recommended Textbook for

Accounting

Authors: Charles T. Horngren, Walter T. Harrison

7th Edition

0132439603, 9780132439602

More Books

Students also viewed these Accounting questions

Question

=+ What characters could become part of everyday culture?

Answered: 1 week ago

Question

=+1. Work in teams of four or five.

Answered: 1 week ago

Question

=+5. Now write the same commercial as a 15-second spot. Think about

Answered: 1 week ago