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please see attached and confirm you can solve each question I. Questions 1. Name and describe three types of responsibility centers. 2. Compare and contrast
please see attached and confirm you can solve each question
I. Questions 1. Name and describe three types of responsibility centers. 2. Compare and contrast an expense center and an investment center. 3. Give some of the advantages of decentralization. 4. Describe some of the methods by which indirect expenses are allocated to a segment. 5. Give the general formula for return on investment (ROI). What are its two components? 6. How is residual income (RI) determined? II. Exercises 1. Present the following information for the Hardware Division of ABC Computer Company, Sales $ 1,400,000 Variable selling and administrative expenses 100,000 Fixed direct manufacturing expenses 35,000 Fixed indirect manufacturing expenses 56,000 Variable manufacturing expenses 400,000 Fixed direct selling and administrative expenses 175,000 Fixed indirect selling and administrative expenses 28,000 2. Given the following data, prepare a schedule that shows contribution margin, contribution to indirect expenses, and net income of the Sharks Division of Hockey, Inc.: Direct fixed expenses $ 324,000 Indirect fixed expenses 259,200 Sales 2,100,000 Variable expenses 1,500,000 What would be the effect on the company income if the segment were eliminated? 3. Three segments (A, B, and C) of Trump Enterprises have net sales of $300,000, $150,000, and $50,000, respectively. A decision is made to allocate the pool of $25,000 of administrative overhead expenses of the home office to the segments, using net sales as the basis for allocation. a. How much of the USD 25,000 should be allocated to each segment? b. If Segment C is eliminated, how much of the USD 25,000 will be allocated to A and B? Page 1 of 2 4. Travel Company has three segments: Air, Land, and Sea. Data concerning income and investment follow: Air Land Sea Contribution to indirect expenses Assets directly used by and identified with the segment $ 43,200 $ 86,400 $ 288,000 576,000 115,200 1,296,000 Assuming that the cost of capital on investment is 12 per cent, calculate the residual income of each of the segments. Do the results indicate that any of the segments should be eliminated? Page 2 of 2Step by Step Solution
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