Hannibal Steel Company has a Transport Services Department that provides trucks to haul ore from the company's mine to its two steel mills-the Northern Plant and the Southern Plant. Budgeted costs for the Transport Services Department total $339,900 per year, consisting of $0.19 per ton variable cost and $289,900 fixed cost. The level of fixed cost is determined by peak-period requirements. During the peak period, the Northern Plant requires 52% of the Transport Services Department's capacity and the Southern Plant requires 48%. During the year, the Transport Services Department actually hauled 123,000 tons of ore to the Northern Plant and 65,600 tons to the Southern Plant. The Transport Services Department incurred $368,000 in cost during the year, of which $53,100 was variable cost and $314,900 was fixed cost. Required: 1. How much of the Transport Services Department's variable costs should be charged to each plant? 2. How much of the $314,900 in fixed cost should be charged to each plant? 3. Should any of the Transport Services Department's actual total cost of $368,000 be treated as a spending variance and not charged to the plants? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much of the Transport Services Department's variable costs should be charged to each plant? Variable cost charged to Northern Plant Variable cost charged to Southern Plant Required 1 Required 2 Required 3 How much of the fixed cost should be charged to each plant? Fixed cost charged to Northern Plant Fixed cost charged to Southern Plant Required 1 Required 2 Required 3 Should any of the Transport Services Department's actual total cost of $368,000 be treated as a spending variance and not charged to the plants? Spending variance Tan Corporation 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 $ 9,800,000 $ 28,000,000 $ 588,000 $ 2,240,000 $ 2,450,000 $ 14,000,000 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 14%. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each division, compute the return on investment (ROI) in terms of margin and turnover. Osaka Yokohama ROI % % Tan Corporation 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 $ 9,800,000 $ 28,000,000 $ 588,000 $ 2,240,000 $ 2,450,000 $ 14,000,000 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 14%. Compute the residual income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 14%. Compute the residual income for each division. Osaka Yokohama Residual income Provide the missing data in the following table for a distributor of martial arts products: (Enter "Turnover" and "ROI" answers to 1 decimal place.) Division Alpha Bravo Charlie Sales $ 244,000 $ 24,400 $ 30,510 Net operating income Average operating assets Margin $ 436,000 5 % % 9 % 4.0 Turnover Return on investment (ROI) % 20.0 % 13.5 %
