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Ohms Motor Company makes electric cars and has only two products, the Simplegreen and the Superiorgreen. To produce the Simplegreen. Ohms Motor employed assets
Ohms Motor Company makes electric cars and has only two products, the Simplegreen and the Superiorgreen. To produce the Simplegreen. Ohms Motor employed assets of $16,000,000 at the beginning of the period, and $16,500,000 of assets at the end of the period. Other costs to manufacture the Simplegreen include: (Click the icon to view the data.) General administration and selling costs total $34,768,000 for the period. In the current period, Ohms Motor produced 12,500 Simplegreen cars using 6,600 setup-hours and 125,000 machine-hours. Ohms Motor sold these cars for $17.000 each. The company bases its ROI on average invested capital Required 1. Assuming that Ohms Motor defines investment as average assets during the period, what is the ratum on investment (ROI) for the Simplegreen division? 2. Calculate the residual income (R) for the Simplegreen division if Ohms Motor has a required rate of return of 13% on investments X Data table as a Direct materials $ 8,400 per unit Setup Production $ $ 1,700 per setup-hour 445 per machine-hour
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