Crane Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Sales revenue Variable expenses Direct fixed expenses Average assets Required rate of return Retail Stores $9,910,000 3,860,000 4,360,000 7,860,000 11% Internet $3,860,000 1,410,000 910,000 3,860,000 11% Catalog Sales $3,010,000 1,710,000 1,110,000 1,960,000 11%
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- Calculate the Return on Investment from the following responsibility report data using total revenue as the base: Account Revenues Clothing revenue Clothing accessories revenue Expenses Associates wages Managers wages Cost of clothing sold Cost of accessories sold Equipment/foxture repairs Responsibility report data Actual $419,769 17,492 $48,641 29,410 262,242 6,372 786 1,575 Utilities Be sure to enter the answer as a percentage but do not include the % sign. Round to two decimal places.Customers as a Cost Object Morrisom National Bank has requested an analysis of checking account profitability by customer type. Customers are categorized according to the size of their account: low balances, medium balances, and high balances. The activities associated with the three different customer categories and their associated annual costs are as follows: Additional data concerning the usage of the activities by the various customers are also provided: Required: (Note: Round answers to two decimal places.) 1. Calculate a cost per account per year by dividing the total cost of processing and maintaining checking accounts by the total number of accounts. What is the average fee per month that the bank should charge to cover the costs incurred because of checking accounts? 2. Calculate a cost per account by customer category by using activity rates. 3. Currently, the bank offers free checking to all of its customers. The interest revenues average 90 per account; however, the interest revenues earned per account by category are 80, 100, and 165 for the low-, medium-, and high-balance accounts, respectively. Calculate the average profit per account (average revenue minus average cost from Requirement 1). Then calculate the profit per account by using the revenue per customer type and the unit cost per customer type calculated in Requirement 2. 4. CONCEPTUAL CONNECTION After the analysis in Requirement 3, a vice president recommended eliminating the free checking feature for low-balance customers. The bank president expressed reluctance to do so, arguing that the low-balance customers more than made up for the loss through cross-sales. He presented a survey that showed that 50% of the customers would switch banks if a checking fee were imposed. Explain how you could verify the presidents argument by using ABC.Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values. A. In the correct format, prepare the income statement using the following information: B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. C. Prepare a short response to accompany the income statement that explains why uncontrollable costs are included in the income statement.
- Please send answer in chart set up Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income AverageInvested Assets Electronics $ 39,840,000 $ 2,988,000 $ 16,600,000 Sporting goods 25,200,000 2,142,000 12,600,000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company?2. Assume a target income level of 11% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company?3. Assume the Electronics department is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted?Use the following information for Short Exercises S15-6 through S15-10. Accel’s Companies, a home improvement store chain, reported the following summarized figures: Requirements Compute the profit margin ratio for Accel’s Companies for 2018. Compute the rate of return on total assets for 2018.Preparation of SCI for a Merchandising Business Using the Multistep Approach Instructions: Prepare a Statement of Comprehensive Income for the year ended December 31,2020 the using the following account titles listed. Cost of Sales ₱2,675,000 Depreciation expense ₱105,000 Rent expense ₱240,000 Salaries expense ₱360,000 Sales Discount ₱826,500 Sales Returns and Allowances ₱275,500 Sales ₱5,510,000 Supplies expense ₱540,000 Taxes ₱92,400 Utilities expense ₱180,000
- Refer to the information for Jasper Company on the previous page.Required:1. Prepare an income statement for Jasper for last year. Calculate the percentage of sales for eachline item on the income statement. (Note: Round percentages to the nearest tenth of a percent.)2. CONCEPTUAL CONNECTION Briefly explain how a manager could use the incomestatement created for Requirement 1 to better control costs.Additional Activities Now that you have learned how to forecast revenues and cost of the business, investigate how these concepts are being applied by existing businesses in your community. Using the table below, fill in the necessary information based on your investigation. Daily Revenue and Cost Name of Business: Projected Projected Volume Revenue Projected Cost Mark-up Selling (D) (E) Costs of per Unit Price Average Merchandisel Purchases (A) (B) (C) No. of Products (Daily) (Daily) Items Sold (Daily) (B)= (A x C =A + E = C x D K = (A x D) .50) B Ex. Bag 150.00 75.00 225.00 10 2250 1500 yd belugm COLLEC tol elubom r borlain even uoy Jar wo Aan peseConsider a telecommunication service provider. You have the following quarterly data: STATISTICS TYPICAL CONSUMER Number of referrals per period (n=n1+ n2) 5 of which, customers that joined due to the referral (n1) 3 of which, customers that would have joined anyway (n2) 2 Marketing cost per period (Mty) $30 Average gross margin (Aty) $78 Cost of referral (aty) $15 Acquisition cost savings (ACQ1ty and ACQ2ty) $10 Yearly discount rate (r) 15% Calculate CRV of a typical customer for one year (over 4 quarters).
- The manager of the West store has concerns relating to the store’s financial performance and has asked for help analyzing transfer costs. After calculating the operating income in dollars and the operating income percent, analyze the following financial information to determine costs that may need further investigation. It may be helpful to perform a vertical analysis (i.e., perform a vertical analysis). warehouse west store sales $18,920 $43,860 cost of goods sold 9,082 21,053 gross profit $9,838 $22,807 selling expenses 860 2,752 wages expense 4,730 15,351 costs allocated from corporate 2,838 4,386 Total expenses $8,428 $22,489 operating income/(loss) $ ? ? Operating Income/(loss) % ? ?Background Consider the following information for the company Freddie's Furniture Supplies, who manufacture outdoor furniture: Income Statement Freddie's Furniture Supplies Year Ended 31st December 2020 Net Sales Revenue $290,350 less: COGS $132,560 = Gross Profit $157,790 less: Operating (Non Product) Expenses $85,900 equals: Net Profit $71,890 Beginning and Ending Finished Goods, of the year, were $32,000 and $14,600 respectively. Question What was the COGM (Costs of Goods Manufactured) for Freddie's company for the year ended 31st December 2020? Select one: a. Cannot be calculated with the information provided. O b. COGM = $147,160 O c. COGM = $115,160 O d. COGM = $129,7601. OBJECTIVES: 1. Prepare Statement of Comprehensive Income of a Merchandising Business Using a Multi-Step Approach II. 2. Prepare a multi-step Statement of Comprehensive Income for the following accounts taken from Tin's Ready to Wear Companyfor the period ended of December 31, 2019 Net Sales Php 75,000.00, Cost of Sales Php 30,000.00, General and Administrative Expenses Php12,000.00 Selling Expenses Php25,000.00 (Please refer to the 2nd picture for more information.)