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Billing's Company | ||
Ans 1 | ||
Particulars | Amount ($) | |
Sales | 22,300,000.00 | A |
Variable Expenses | 13,999,600.00 | B |
Contribution Margin | 8,300,400.00 | C=A-B |
Fixed Expenses | 6,115,000.00 | D |
Operating Income | 2,185,400.00 | E=C-D |
Average Assets | 5,575,000.00 | F |
ROI | 39.20% | G=E/F |
Ans 2 | ||
Particulars | Amount ($) | |
Sales | 9,650,000.00 | H |
Variable Expenses | 6,272,500.00 | I |
Contribution Margin | 3,377,500.00 | J=H-I |
Fixed Expenses | 2,583,600.00 | K |
Operating Income | 793,900.00 | L=J-K |
Average Assets | 3,857,400.00 | M |
ROI | 20.58% | N=L/M |
Ans 3 | ||
Particulars | Amount ($) | |
Sales | 31,950,000.00 | O=A+H |
Variable Expenses | 20,272,100.00 | P=B+I |
Contribution Margin | 11,677,900.00 | Q=O-P |
Fixed Expenses | 8,698,600.00 | R=D+K |
Operating Income | 2,979,300.00 | S=Q-R |
Average Assets | 9,432,400.00 | T=F+M |
ROI | 31.59% | U=S/T |
Reduction in ROI by | 7.61% | V=G-U |
Ans 4- New product line will decrease ROI by 7.61% so it should not be accepted. | ||
Ans 5- Headquarter is anxious because Office products division is doing very well and adding new product line will benefit company as a whole and also keep the division on ground by reducing its ROI but increasing its operating income in monetary terms. | ||
Ans 6 a | ||
Required Rate of return | 14% | W |
Average Assets | 5,575,000.00 | See F |
Minimum Return | 780,500.00 | X= W*F |
Operating Income | 2,185,400.00 | See E |
Residual Income | 1,404,900.00 | Y=E-X |
Ans 6 b | ||
Required Rate of return | 14% | See W |
Average Assets | 3,857,400.00 | See M |
Minimum Return | 540,036.00 | Z=W*M |
Operating Income | 793,900.00 | See L |
Residual Income | 253,864.00 | AA= L-Z |
Ans 6 c | ||
Required Rate of return | 14% | See W |
Average Assets | 9,432,400.00 | See T |
Minimum Return | 1,320,536.00 | AB= W*T |
Operating Income | 2,979,300.00 | See S |
Residual Income | 1,658,764.00 | AC=S-AB |
Increase in Residual Income by | 253,864.00 | AD= AC-Y |
Ans 6 d- New product line will Increase Residual Income by $ 253,864 so it should be accepted. |
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division "But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division. “But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
“I know headquarters wants us to add that new product line,” said Dell Havasi, manager of Billings Company’s Office Products Division. “But I want to see the numbers before I make any move. Our division’s return on investment (ROI) has led the company for three years, and I don’t want any letdown.” Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division. "But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division. "But I want to see the numbers before I make any move. Our division's return on investment (ROM) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of rol, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," sald Dell Havasi, manager of Billings Company's Office Products Division "But I want to see the numbers before I make any move. Our division's return on Investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division. "But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division "But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
"I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division. "But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...
“I know headquarters wants us to add that new product line,” said Dell Havasi, manager of Billings Company’s Office Products Division. “But I want to see the numbers before I make any move. Our division’s return on investment (ROI) has led the company for three years, and I don’t want any letdown.” Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who...