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hello, can you please help me solve this? i want to check if i did the homework i submitted correctly. Bag 1 160 100 4
hello, can you please help me solve this? i want to check if i did the homework i submitted correctly.
Bag 1 160 100 4 Division Bag 2 Product Pink Purple Pink Purple Production volume (pieces) 500 900 700 500 Sales volume (pieces) 400 900 600 30 Selling price (USD/piece) 200 300 200 170 Var. prod. costs (USD/piece) 120 65 Var. distr. costs (USD/piece) 6 5 5 All fixed costs are indirect. Fixed production costs and distribution expenses are measured at the divisional level. Both divisional as well as headquarters' administrative expenses occur. All costs and expenses measured at divisional level are considered as controllable by division. Divisions cannot influence administrative headquarters' expenses as well as interests paid and income tax: Division Bag 1 Bag 2 Fixed production costs 11 000 32 000 Fixed distribution costs 9000 12 000 Fixed administrative expenses - divisions 6 000 21 000 Fixed administrative expenses - headquarters 40 000 Interests paid 7 000 Income tax 3 500 Data related to controllable divisional assets and short term-liabilities are as follows: Division Bag 1 Bag 2 Equipment 11 000 23 000 Inventories 7 000 12 000 Receivables 3 700 18 000 Current liabilities (non-interest-bearing) 15 000 29 000 The required return on capital employed in net assets controlled by the divisions is 9 percent. Variable costing is used for inventory valuation. Questions and tasks: 1) Prepare the profit and loss statement of the whole company. How much is EBIT, EAT and ROS? 2) Evaluate the performance of particular divisions using residual income measure (RI) and return on capital employed measure (ROCE) or return on investment measure (ROI) Step by Step Solution
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