Question
Ten years ago, Toni and Mandy purchased a group of boutique bakery shops located in several cities. Based on the current executive compensation plan, managers
Ten years ago, Toni and Mandy purchased a group of boutique bakery shops located in several cities. Based on the current executive compensation plan, managers can earn a bonus based on meeting the budgeted profit target. At this point, Toni is proposing a change in the executive compensation to have bonuses computed based on residual income. To aid her in this analysis Toni asked the accountant to summarize key financial results from the prior year as shown below:
| Wrentham | Milford | Franklin | Portland | Stamford |
Revenue | $800,000 | $990,000 | $397,500 | $900,000 | $450,000 |
Net operating income | $40,000 | $59,400 | $31,800 | $49,500 | $31,500 |
Average operating assets | $500,000 | $550,000 | $265,000 | $600,000 | $225,000 |
Stockholders equity | $425,000 | $467,500 | $225,250 | $510,000 | $191,250 |
Residual income (loss) | ($10,000) |
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Answer each of the following questions associated with the information provided. In answering the numerical questions round your final answer to at least two decimal points. For example, a margin of 10.4115% would be 10.41%. A turnover of 3.3621 would be 3.36.
1. | Wrentham Margin is |
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2. | Wrentham Turnover is |
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3. | Milford Margin is |
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4. | Milford Turnover is |
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5. | Franklin Margin is |
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6. | Franklin Turnover is |
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7. | Franklin Residual Income is |
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8. | Portland Margin is |
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9. | Portland Residual Income is |
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10. | Stamford Margin is |
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11. | Stamford Turnover is |
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