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Please answer questions down below as there were charts that I could not paste in this box. Thank You. There are 4 questions. 18. Responsibility
Please answer questions down below as there were charts that I could not paste in this box. Thank You. There are 4 questions.
18. Responsibility Centers. Petroleum Products, Inc., operates primarily in the United States and has several segments: 1 Accounting and finance: responsible for recording financial information and preparing financial reports. 2 Human resources: responsible for hiring employees and maintaining personnel records. 3 Retail stores: responsible for sales prices and all costs within each store. 4 Advertising: responsible for promotional materials. 5 Production: responsible for manufacturing company products. 6 International operations: acts as an independent segment responsible for all facets of the business outside of the United States. Required: For each of the preceding segments, identify whether it is a cost center, profit center, or investment center. Explain your answer. 19. Segmented Net Income. Valdez Company has two divisions Appliances and Tools. The following segmented financial information is for the most recent fiscal year ended December 31. Appliances Division Sales $3,000,000 Cost of goods sold 1,600,000 Allocated overhead 375,000 Selling & admin expenses 250,000 Tools Division $1,000,000 430,000 125,000 200,000 Assume the tax rate is 30 percent. Required: 1 Prepare a segmented income statement using the format presented in Figure 11.3 \" Segmented Income Statements (Game Products, Inc.)\". Include the profit margin ratio for each division at the bottom of the segmented income statement. 2 Using net income as the measure, which division is most profitable? Explain why this conclusion might be misleading. 3 What does the profit margin ratio tell us about each division? Why do organizations often use profit margin ratio to evaluate division performance rather than simply using net income? 20. Return on Investment (ROI). Valdez Company has two divisionsAppliances and Tools. (This is the same company as the previous exercise. This exercise can be assigned independently.) Segmented income statement information for the most recent fiscal year ended December 31 is shown as follows. Assume the Appliances division had average operating assets totaling $6,500,000 for the year, and the Tools division had average operating assets of $1,750,000. " Required: 1 Calculate return on investment for each division. 2 What does return on investment tell us about each division? Indicate why this measure is useful in evaluating investment centers. 21.Operating Profit Margin, Asset Turnover, and Return on Investment (ROI). Financial information for Amador Sports, Inc., for the most recent fiscal year appears as follows. All dollar amounts are in thousands. " Required: 1 2 3 Calculate average operating assets for each division. (Hint: land held for sale is not an operating asset.) Calculate operating profit margin, asset turnover, and return on investment for each division. What does this information tell us about each divisionStep by Step Solution
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