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Required: a) If the Soccer Equipment Division increased its sales by 10%, how much would MU Ltd's net profit change and what would the final
Required: a) If the Soccer Equipment Division increased its sales by 10%, how much would MU Ltd's net profit change and what would the final net profit figure be? Assume that all cost behaviour patterns remained constant. When calculating any ratios, round to 2 decimal places (example 22.53%) (3 marks) b) The CEO wants to design a more effective performance management system to evaluate the performance of the Division Managers beyond simply using financial measures. Provide at least two possible non-financial indicators that can be used to evaluate the performance of these managers and explain why these indicators are better than traditional financial measures. (2 marks) Note: Show all working out and clearly distinguish between your 4 responses to part a) and b) a) If the Soccer Equipment Division increased its sales by 10%, how much would MU Ltd's net profit change and what would the final net profit figure be? Assume that all cost behaviour patterns remained constant. When calculating any ratios, round to 2 decimal places (example 22.53%) (3 marks) b) The CEO wants to design a more effective performance management system to evaluate the performance of the Division Managers beyond simply using financial measures. Provide at least two possible non-financial indicators that can be used to evaluate the performance of these managers and explain why these indicators are better than traditional financial measures. (2 marks) Note: Show all working out and clearly distinguish between your h responses to part a) and b) a) If the Soccer Equipment Division increased its sales by 10%, how much would MU Ltd's net profit change and what would the final net profit figure be? Assume that all cost behaviour patterns remained constant. When calculating any ratios, round to 2 decimal places (example 22.53%) (3 marks) b) The CEO wants to design a more effective performance management system to evaluate the performance of the Division Managers beyond simply using financial measures. Provide at least two possible non-financial indicators that can be used to evaluate the performance of these managers and explain why these indicators are better than traditional financial measures. (2 marks) Note: Show all working out and clearly distinguish between your h responses to part a) and b) The Segmented Profit and Loss Statement for MU Ltd is presented below: Soccer Soccer Merchandise Equipment Total Company Division Division Sales Revenue $615,500 $519,200 $1,134,700 Less: Variable Costs $280,400 $214,000 $494,400 Contribution $335,100 $305,200 $640,300 Margin Less: Traceable $83,850 $53,950 Fixed Costs Division Segment $251,250 $251,250 Margin Less: Common Fixed Costs Net Profit $137,800 $502,500 $82,500 $420,000
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