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PLEASE DONT POST THE HANDWRITTEN PAPER. Segmented Net Income, ROI, and RI. Custom Auto Company has two divisionsEast and West. The following segmented financial information
PLEASE DONT POST THE HANDWRITTEN PAPER.
Segmented Net Income, ROI, and RI. Custom Auto Company has two divisionsEast and West. The following segmented financial information is for the most recent fiscal year:
PLEASE DONT POST THE HANDWRITTEN PAPER.
29. Segmented Net Income, ROI, and RI. Custom Auto Company has two divisions-East and West. The following segmented financial information is for the most recent fiscal year: The East division had average operating assets totaling $1,800,000 for the year, and the West division had average operating assets of $2,600,000. Assume the cost of capital rate is 8 percent, and the company's tax rate is 30 percent. Division managers are responsible for sales, costs, and investments in assets. Required: 1. What type of responsibility center is each division at Custom Auto Company? Explain. 2. Prepare a segmented income statement using the format presented in Figure 5.3 "Segmented Income Statements (Game Products, Inc.)". Include the profit margin ratio for each division at the bottom of the segmented income statement. 3. Calculate ROI for each division. 4. Calculate RI for each division. 5. Summarize the answers to parts a,b, and c using the format presented in Figure 5.11 "Five Performance Measures at Game Products, Inc.". What does this information tell us about each divisionStep by Step Solution
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