Zula, a national manufacturer of lawn-mowing and snow-blowing equipment segments its business according to customer type: Professional and Residential. Assume the following divisional information was available for the past year (in thousands of dollars): (Click the icon to view the information.) Read the requirements Requirement 1. Calculate cach division's ROL First enter the formula, then calculate each division's Rol using the expanded formula. ROI X Data table Requirements Sales Operating Income Total Assets Residential S 850,000 $ 68,000 $ 200,000 Professional $ 1.095.000 $ 153,300 $ 365.000 Assume that management has a 25% target rate of relum for each division. 1. Calculate each division's ROI, 2. Calculate each division's sales margin. Interpret your results. 3. Calculate each division's capital turnover. Interpret your results. 4. Use the expanded ROI formula to confirm your results from Requirement 1. What can you conclude? 5. Calculate each division's residual income (RI). Interpret your results Print Done Print Done Help me solve this Video Get more help. Clear all Check answer Germain Motors manufactures specialty tractors. It has two divisions: a Tractor Division and a Tine Division. The Tractor Division can use the tires produced by the Tire Division. The market price per tire is $45. The Tire Division has the following costs per tire: (Click the icon to view the costs and additional information.) Read the requirements Requirement 1. Assume that the Tire Division has excess capacity, meaning that it can produce tires for the Tractor Division without giving up any of ils current lire sales to outsiders. If Germain Motors has a negotiated transfer price policy, what a , is the lowest acceptable transfer price? What is the highest acceptable transfer price? (Assume the S6 includes only the variable portion of conversion costs.) The lowest acceptable transfer price is the Tire Division's direct material cost per tire market price per tire total cost per tire x More info X variable cost per tire Requirements Direct material cost per tire S24 Conversion costs per tire $6 (Assume the $6 includes only the variable portion of conversion costs.) Fixed manufacturing overhead cost for the year is expected to total $116,000. The Tire Division expects to manufacture 58,000 tires this year. The fixed manufacturing overhead per tire is S2 ($116.000 divided by 58,000 tires). 1. Assume that the Tire Division has excess capacity, meaning that it can produce tires for the Tractor Division without giving up any of its current tire sales to outsiders. If Germain Motors has a negotiated transfer price policy, what is the lowest acceptable transfer price? What is the highest acceptable transfer price? 2. If Germain Motors has a post-plus transfer price policy of full absorption cost plus 25% what would the transfer price be? 3. If the Tire Division is currently producing at capacity (meaning that it is selling every single tire it has the capacity to produce), what would likely be the fairest transfer price strategy to use? What would be the transfer price in this case? Print Done Print Done Help me solve this Video Get more help
