Meiji Isetan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Yokohama $ 10,100,000 $ 31,000,000 $ 808,000 $3,100,000 Net operating income Average operating assets $2,525,000 $ 15,500,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. Osaka Sales 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 17%. Compute the residual income for each division. 3. Is Yokohama's greater amount of residual income an indication that it is better managed?

Meiji Isetan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Yokohama $ 10,100,000 $ 31,000,000 $ 808,000 $3,100,000 Net operating income Average operating assets $2,525,000 $ 15,500,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. Osaka Sales 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 17%. Compute the residual income for each division. 3. Is Yokohama's greater amount of residual income an indication that it is better managed?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 11E: The operating income and the amount of invested assets in each division of Conley Industries are as...

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Meiji Isetan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,800,000 $ 28,000,000 Net operating income $ 588,000 $ 2,240,000 Average operating assets $ 2,450,000 $ 14,000,000 Required: 1a. For each division, compute the return on investment (ROI) in terms of margin and turnover. Osaka Yokohama ROI ?# % ?# % 1b. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 14%. Compute the residual income for each division. Osaka Yokohama Residual income ?# ?# 1c. Is Yokohama’s greater amount of residual income an indication that it is better managed? YES
Meiji Isetan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Sales Net operating income Average operating assets Required: Osaka Division $ 10,800,000 Yokohama $ 38,000,000 $ 648,000 $ 3,600,000 $ 3,040,000 $ 19,000,000 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 15%. Compute the residual income for each division. 3. Is Yokohama's greater amount of residual income an indication that it is better managed? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 For each division, compute the return on investment (ROI) in terms of margin and turnover. ROI Osaka Yokohama % %
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Meiji Isetan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,800,000 $ 28,000,000 Net operating income $ 588,000 $ 2,240,000 Average operating assets $ 2,450,000 $ 14,000,000 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 14%. Compute the residual income for each division. 3. Is Yokohama’s greater amount of residual income an indication that it is better managed? Osaka Yokohama ROI % % Osaka Yokohama Residual income
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 $ 11,000,000 $ 40,000,000 Net operating income $ 880,000 $ 4,000,000 Average operating assets $ 2,750,000 $ 20,000,000 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? REQUIRED 1 For each division, compute the return on investment (ROI) in terms of margin and turnover. Osaka Yokohama ROI % % REQUIRED 2 Assume that the company evaluates performance using residual income and that the minimum…
Meiji Isetan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 9,600,000 $ 26,000,000 Net operating income $ 672,000 $ 2,340,000 Average operating assets $ 3,200,000 $ 13,000,000 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 16%. Compute the residual income for each division. 3. Is Yokohama’s greater amount of residual income an indication that it is better managed?
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Consider the following data and determine which of the corporate divisions is more profitable. Explain your reasoning. Domestic International Operating income $8,000,000 $ 11,000,000 Average total assets 20,000,000 32,000,000 C Begin by selecting the formula to calcula return on investment (ROI), and then enter the amounts to calculate each division's ROI. (Enter your answer as a percent rounded to one decimal place, X.X%) ROI % Domestic % International In terms of return on investment (ROI) the Division is more profitable because
Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Sales Net operating income. Average operating assets Required 1 Required: 1. For each division, compute the return on investment (ROI). 2. Compute the residual income for each division assuming the company's minimum required rate of return is 15%. Division Complete this question by entering your answers in the tabs below. Required 2 Residual income Osaka $ 10,500,000 $630,000 $ 3,500,000 Osaka Yokohama $ 35,000,000 $ 2,800,000 $ 17,500,000 Compute the residual income for each division assuming the company's minimum required rate of return is 15%. Yokohama