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Student Name:
Class:
AC Division SO Division
8,000$ 20,000$
3,200 7,000
Instructor
McGraw-Hill/Irwin
Problem 14-40
COLONIAL PHARMACEUTICALS
Part a. Compute divisional income for the two divisions.
Part c. Calculate ROI for the two divisions
Part d. Compute residual income for the two divisions
Part b. Calculate the operating margin for the two divisions
Sales
Cost of goods sold
AC Division SO Division
600$ 1,800$
3,200 7,000
Given Data P14-40:
COLONIAL PHARMACEUTICALS
Allocated corp. overhead
Cost of goods sold
Student Name:
Class:
3,750,000$
Correct!
250,000$
2,200,000
PITT, INC.
Instructor
McGraw-Hill/Irwin
Problem 14-43
Part a. Compute ROI if the new machine is not acquired.
Part b. Compute ROI if the new machine is acquired.
Round ROI to nearest tenth of a percent (3 decimal places)
Part c. Compute ROI for the second year if the new machine is acquired.
Round ROI to nearest tenth of a percent (3 decimal places)
Operating profit
Operating profit
Operating profit for second year:
Costs:
Variable
16,000,000$
4,000,000$
5,000,000$
PITT, INC.
Expected Income Statement
Forbes Division
Given Data P14-43:
Operating costs
Sales revenue
Forbes Division total assets
Additional Information:
Amount invested in automated equipment
Student Name:
Class:
Increase Over
Current Year Base Year Base Year
20,500,000$ 20,000,000
12.0% 10.0%
PHARM-IT
Instructor
McGraw-Hill/Irwin
Problem 14-48
Sales revenues
ROI if R&D is expensed
Part a. Round ROI to nearest tenth of a percent (three decimal places).
Increase Over
This Year Base Year Base Year
20,500,000$ 20,000,000
5,000,000$
PHARM-IT
Given Data P14-48:
Sales revenues
Costs incurred
Amount spent on R&D this year
Additional Information:
Student Name:
Class:
Regular
Merchandise [a] Appliances Total [b]
4,680,000$ 1,350,000$ 6,030,000$
2,934,000 1,026,000 3,960,000
Floor Plan
Option [c]
6,030,000$
3,960,000
Merchandise [a] Appliances Total
4,680,000$ 1,350,000$ 6,030,000$
2,934,000 1,026,000 3,960,000
HY'S STORE - BOISE
Summary of Alternatives
Income Statements
Instructor
McGraw-Hill/Irwin
Problem 14-50
Parts a. and b.
Sales revenue
Cost of Sales
Part c.
Sales revenue
Cost of Sales
Part e.
Sales revenue
Cost of Sales
8%
4,680,000$
2,934,000$
468,000$
3,375,000$
HY'S STORE - BOISE
Given Data P14-50:
Required ROI as a percent of total assets
Estimates for the coming year:
Existing conditions:
Revenues
Cost of goods sold
Operating expenses
Investment in store assets
