Posted: May 9th, 2023
The balance sheet for the Sand Dollar division of Stellar Company
Question 1
The balance sheet for the Sand Dollar division
of Stellar Company shows that for 2011 it had operating assets at the beginning
of the year of $250,000 and $300,000 at the end of the year. During the year,
the division had $14,000 of net operating income on sales of $450,000.A. What is the ROI of the division?
B. If sales were $600,000 and net operating income was $30,000 and operating
assets at the end of the year were $350,000, what would ROI be?All sources used, including the textbook, must be referenced; paraphrased and
quoted material must have accompanying citations. For problems, be sure to
answer all questions and provide all requested information
Question 2
Bienville Company has two operating divisions,
and the financial information for each division for 2010 is:Top DivisionBottom DivisionSales$2,000,000$3,500,000Average operating assets1,000,0001,000,000Net operating income180,000210,000Property, plant and equipment475,000400,000Compute ROI for each division. Which manager
seems to be doing the best job? Why? Does ROI necessarily the best measure of
the performance of these managers?Your response should be at least 200 words in
length. All sources used, including the textbook, must be referenced;
paraphrased and quoted material must have accompanying citations. For problems,
be sure to answer all questions and provide all requested information
Question 3
Skiboards, Inc. has two divisions. The Boards Division makes the
board that is made into Skiboards by the Ski Division, but the Board Division
can also sell the boards it makes to outside customers. In 2011, The Boards
Division reported the following information:Selling price
per board$ 52Variable costs
per board$ 22Number of
boards:Produced in 201110,000Sold to the Ski Division8,000Sold to outside customers2,000Sales from the Boards Division to the Ski Division were made at
the same price that sales were made to outside customers. The Ski Division
incurred an additional $100 per board in variable costs in shaping the boards
into Skiboards and then sold the finished Skiboards for $300 each.
A. Prepare income statements for the Boards Division, the Ski
Division, and for Skiboards, Inc.
B. Assume that the Boards Divisionâs manufacturing capacity is
limited to 10,000 boards per year and that next year, the Ski Division wants to
buy 9,000 boards from the Boards Division instead of the 8,000 boards that it
bought in 2011 (the Boards Division is the only place that the Ski Division can
buy these boards). From the standpoint of the company as a whole, should the
Boards Division sell the 1,000 additional boards to the Ski Division or
continue to sell those boards to outside customers?
Your response should be at least 200 words in length. All
sources used, including the textbook, must be referenced; paraphrased and
quoted material must have accompanying citations. For problems, be sure to
answer all questions and provide all requested information
Question 4
Magic Lawnmower Company assembles lawnmowers from a number of
different parts. Some of those parts are manufactured by Magic Lawnmower and
some of the parts are purchased from other companies. The vendor for the blades
that Magic Lawnmower uses has just increased the price of blades to $10 per
blade for the first 5,000 blades and $9 per blade for all blades ordered during
the year in excess of 5,000. Magic Lawnmower expects to use 7,500 blades this
year. Magic lawnmower can make the blades for the following unit costs:Direct materials$3.50Direct labor$1.75Variable
manufacturing overhead$4.25If Magic lawnmower elects to make the blades rather than buy the
blades from its vendor, what are the opportunity costs? If Magic lawnmower
elects to make the blades rather than buy them, what are the opportunity costs?
Your response should be at least 200 words in length. All
sources used, including the textbook, must be referenced; paraphrased and
quoted material must have accompanying citations. For problems, be sure to
answer all questions and provide all requested information
Question 5
The following
information is provided by XYZ Corporation:
a. The manager of Department X is responsible for generating
cash receipts and incurring costs so the corporation can make a profit. This
manager is not responsible for decisions about what equipment to buy.
b. The manager of Department Y is responsible for operation of the call center
where customers order products from the corporation.
c. Department Z produces one of the parts that is used to make the products
that the corporation sells to consumers.Classify each of these departments as a cost center, a profit center, or an
investment center, and explain the classification that you assigned to each
department.Your response should be at least 200 words in length. All sources used,
including the textbook, must be referenced; paraphrased and quoted material
must have accompanying citations. For problems, be sure to answer all questions
and provide all requested information
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