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Sheffield Industries has manufactured prefabricated houses for over 2 0 years. The houses are constructed in sections to be assembled on customers' lots. Sheffield expanded
Sheffield Industries has manufactured prefabricated houses for over years. The houses are constructed in sections to be assembled on customers' lots. Sheffield expanded into the precut housing market when it acquired Jensen Company, one of its suppliers. In this market, various types of lumber are precut into the appropriate lengths, banded into packages, and shipped to customers' lots for assembly. Sheffield designated the Jensen Division as an investment center. Sheffield uses return on investment ROI as a performance measure with investment defined as average operating assets. Management bonuses are based in part on ROI. All investments are expected to earn a minimum rate of return of Jensen's ROI 'has ranged from to since it was acquired. Jensen had an investment opportunity in that had an estimated ROI of Jensen management decided against the investment because it believed the investment would decrease the division's overall ROI. Selected financial information for Jensen is presented here. The division's average operating assets were $ for the year SHEFFIELD INDUSTRIES Jensen Division Selected Financial Information For the Year Ended December Sales $ Contribution margin Controllable margin Calculate the following performance measures for for the Jensen Division. Round ROI to decimal place, eg Return on investment ROI Residual income $
Sheffield Industries has manufactured prefabricated houses for over years. The houses are constructed in sections to be assembled on customers' lots. Sheffield expanded into the precut housing market when it acquired Jensen Company, one of its suppliers. In this market, various types of lumber are precut into the appropriate lengths, banded into packages, and shipped to customers' lots for assembly. Sheffield designated the Jensen Division as an investment center.
Sheffield uses return on investment ROI as a performance measure with investment defined as average operating assets. Management bonuses are based in part on ROI. All investments are expected to earn a minimum rate of return of Jensen's ROI 'has ranged from to since it was acquired. Jensen had an investment opportunity in that had an estimated ROI of Jensen management decided against the investment because it believed the investment would decrease the division's overall ROI.
Selected financial information for Jensen is presented here. The division's average operating assets were $ for the year
SHEFFIELD INDUSTRIES Jensen Division
Selected Financial Information
For the Year Ended December
Sales $
Contribution margin
Controllable margin
Calculate the following performance measures for for the Jensen Division. Round ROI to decimal place, eg
Return on investment ROI
Residual income
$
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