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Use the data pertaining to the Snack Food Division, as shown in Table 1 below, to calculate:a. The economic profit for the division for 2000

Use the data pertaining to the Snack Food Division, as shown in Table 1 below, to calculate:a. The economic profit for the division for 2000 and 2001.b. The economic profit target for the division for 2001.c. The division managers bonus payout (% ofsalary) for 2000 and 2001. (Assume that the slope of the payoff line for 2000 was arbitrarily set by the Berkshire management to equal 1.0.) Plz write down the steps

Assume the base salary of the manager of the Snack Foods Division was 120,000 in both 2000 and 2001. How muchcash would the manager receive from his bonus payouts in 2000 and 2001? Plz write down the steps

Evaluate the Berkshire Industries new incentive plan. What changes would you recommend, if any?

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Table 1 From the income statement: Net operating profit before the following items: Consumer advertising expense Goodwill amortization Net operating profit before taxes Income tax payments Net operating profit after taxes (NOPAT) From the balance sheet: Net operating assets (book): Accumulated amortization of goodwill Economic profit Economic profit performance target Established by management. Operating Data from Berkshire Industries' Snack Foods Division (000) 1996 1997 1998 1999 2000 (23,730) (20,661) 0 0 0 0 137,051 (26,410) 0 110,641 (41,293) 69,348 593,040 0 162,401 184,898 (31,007) (41,568) (15,000) (30,000) 116,394 113,330 (51,501) (54,131) 64,893 630,268 15,000 59,199 580,920 45,000 ? 28,000 2001 194,321 (39,191) (30,000) 125,130 (60,327) 64,803 568,113 75,000 Division manager's bonus: Target bonus Bonus payout (% salary) Note: 1) Cumulative advertising expense through the end of 1997 is 181,410. 2) Cumulative advertising amortized through the end of the 1997 is 167,507. 50% ? 50%

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