Question

Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected...

Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow:

Division
Osaka Yokohama
Sales $ 9,400,000 $ 24,000,000
Net operating income $ 752,000 $ 2,400,000
Average operating assets $ 2,350,000 $ 8,000,000

Required:

1. For each division, compute the return on investment (ROI) in terms of margin and turnover.

2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 18%. Compute the residual income for each division.

3. Is Yokohama’s greater amount of residual income an indication that it is better managed?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected...
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,200,000 $ 22,000,000 Net operating income $ 552,000 $ 1,760,000 Average operating assets $ 2,300,000 $ 11,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for...
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected...
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,200,000 $ 22,000,000 Net operating income $ 552,000 $ 1,760,000 Average operating assets $ 2,300,000 $ 11,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for...
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected...
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 10,800,000 $ 38,000,000 Net operating income $ 648,000 $ 3,040,000 Average operating assets $ 3,600,000 $ 19,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for...
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected...
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,900,000 $ 29,000,000 Net operating income $ 792,000 $ 2,900,000 Average operating assets $ 2,475,000 $ 14,500,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. (Do not round intermediate calculations) 2. Assume that the company evaluates performance using residual income and that the minimum...
4. Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama....
4. Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 10,900,000 $ 39,000,000 Net operating income $ 763,000 $ 3,510,000 Average operating assets $ 2,725,000 $ 19,500,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return...
Meiji Isetan Corp. of Japan has two regional divisions with headquarter in Osaka and Yokohama. Selected...
Meiji Isetan Corp. of Japan has two regional divisions with headquarter in Osaka and Yokohama. Selected data on the two divisions follow. Division Osaka Sales $ 10,200,000 $ 32,000,000 Net operating income $ 816,000 $ 3,200,000 Average operating assets $ 2,550,000 $16,000,000 Required: For each division. Compute the return on investment (ROI) in terms of margin and turnover. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 17%....
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected...
Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 10,800,000 $ 38,000,000 Net operating income $ 648,000 $ 3,040,000 Average operating assets $ 3,600,000 $ 19,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for...
Problem 10-18 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2] “I know headquarters wants us...
Problem 10-18 Return on Investment (ROI) and Residual Income [LO10-1, LO10-2] “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...
Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer...
Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31: Revenues—East $ 884,000 Revenues—West 1,050,000 Revenues—Central 1,870,000 Operating Expenses—East 568,100 Operating Expenses—West 623,520 Operating Expenses—Central 1,170,540 Corporate Expenses—Shareholder Relations 157,000 Corporate Expenses—Customer Support 407,000 Corporate Expenses—Legal 261,000 General Corporate Officers’ Salaries 270,750 The company...
Profit Center Responsibility Reporting A-One Freight Inc. has three regional divisions organized as profit centers. The...
Profit Center Responsibility Reporting A-One Freight Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance using operating income as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31, 20Y3. Revenues—Air Division $ 919,700 Revenues—Rail Division 1,078,900 Revenues—Truck Division 1,935,200 Operating Expenses—Air Division 582,800 Operating Expenses—Rail Division 642,100 Operating Expenses—Truck Division 1,170,300 Corporate Expenses—Shareholder Relations 139,900 Corporate Expenses—Customer Support 515,000 Corporate...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT