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Renata Company has four departments: Materials, Personnel, Manufacturing, and Packaging. Information follows. The four departments share the following indirect expenses for supervision, utilities, and insurance according to their allocation bases. Allocate each of the three indirect expenses to the four departments. 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? Complete this question by entering your answers in the tabs below. Megamart provides the following information on its two investment centers. :xercise 22-10 (Algo) Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 12% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 14% return on investment. Should the new investment opportunity be accepted? The target return is 12% Complete this question by entering your answers in the tabs below. Assume the Electronics center is presented with a new investment oppostunity that will yield at 14% retum on investrient. Should the new irvestment opportunity be accepted? The target retuin is 12%. Megamart provides the following information on its two investment centers. :xercise 22-10 (Algo) Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 12% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 14% return on investment. Should the new investment opportunity be accepted? The target return is 12% Complete this question by entering your answers in the tabs below. Assume a target income of 12% of average assets. Compute residual income for each center. Which center generated the most residual income? Allocate each of the three indirect expenses to the four departments. Below are departmental income statements for a guitar manufacturer. The company classifies advertising, rent, and utilities as indirect expenses. The manufacturer is considering eliminating its Electric Guitar department beause it shows a loss, 1. Prepare a departmental contribution to overhead report 2. Based on contribution to overhead, thouid the electric guitar department be eliminated? Megamart provides the following information on its two investment centers. Exercise 22-10 (Algo) Computing return on investment and residual income; investing decision LO A1 1. Compute return on investment for each center. Using return on investment, which center is most efficient at using assets to generate income? 2. Assume a target income of 12% of average assets. Compute residual income for each center. Which center generated the most residual income? 3. Assume the Electronics center is presented with a new investment opportunity that will yield a 14% return on investment. Should the new investment opportunity be accepted? The target return is 12%. Complete this question by entering your answers in the tabs below. Compute return on investment for each center, Using return on investment, which center is most effoent at using assets to generate income? 1. Prepare a departmental contribution to overhead report. 2. Based on contribution to overhead, should the electric guitar department be eliminated? Complete this question by entering your answers in the tabs below. Prepare a departmental contribution to overhead report
