Exhibit 11-2
Manford Inc. has two divisions â Refrigerators and DishWasher.
Manford Company
Segmented IncomeStatements
For the Current Fiscal Year Ended December31
Refrigerator Division
Dish Washer Division
Sales
$10,000,000
$5,400,000
Cost of goods sold
4,200,000
2,660,000
Gross margin
5,800,000
2,740,000
Allocated overhead (from corporate)
940,000
740,000
Selling and administrative expenses
780,000
360,000
Operating income
4,080,000
1,640,000
Income tax expense (45%)
1,836,000
738,000
Net income
$ 2,244,000
$ 902,000
59. Refer to Exhibit 11-2. Using the segmented incomestatements, what is the profit margin ratio for the RefrigeratorDivision (to the nearest hundredth of a percent)?
a. 22.44%
b. 40.80%
c. 58.00%
d. 42.00%
e. None of the answer choices iscorrect.
60. Refer to Exhibit 11-2. Using the segmented incomestatements, what is the profit margin ratio for the Dish WasherDivision (to the nearest hundredth of a percent)?
a. 30.37%
b. 50.74%
c. 16.70%
d. 49.26%
e. None of the answer choices iscorrect.
61. Refer to Exhibit 11-2. Assume the RefrigeratorDivision has average operating assets totaling $24,000,000 for theyear. What is the division's return on investment (to the nearesthundredth of a percent)?
a. 40.80%
b. 17.00%
c. 24.17%
d. 58.00%
e. None of the answer choices iscorrect.
62. Refer to Exhibit 11-2. Assume the RefrigeratorDivision has average operating assets totaling $24,000,000 for theyear and the company's cost of capital rate is 15 percent. What isthe residual income for the Refrigerator division?
a. $2,200,000
b. $2,580,000
c. $6,400,000
d. $480,000
e. None of the answer choices iscorrect.
63. Refer to Exhibit 11-2. Assume the Dish WasherDivision has average operating assets totaling $6,560,000 for theyear and the company's cost of capital rate is 15 percent. What isthe residual income for the Dish Washer division?
a. $656,000
b. $4,744,000
c. $246,000
d. $2,084,000
e. None of the answer choices iscorrect.
Exhibit 11-2
Manford Inc. has two divisions â Refrigerators and DishWasher.
Manford Company | ||
Segmented IncomeStatements | ||
For the Current Fiscal Year Ended December31 | ||
Refrigerator Division | Dish Washer Division | |
Sales | $10,000,000 | $5,400,000 |
Cost of goods sold | 4,200,000 | 2,660,000 |
Gross margin | 5,800,000 | 2,740,000 |
Allocated overhead (from corporate) | 940,000 | 740,000 |
Selling and administrative expenses | 780,000 | 360,000 |
Operating income | 4,080,000 | 1,640,000 |
Income tax expense (45%) | 1,836,000 | 738,000 |
Net income | $ 2,244,000 | $ 902,000 |
59. Refer to Exhibit 11-2. Using the segmented incomestatements, what is the profit margin ratio for the RefrigeratorDivision (to the nearest hundredth of a percent)?
a. 22.44%
b. 40.80%
c. 58.00%
d. 42.00%
e. None of the answer choices iscorrect.
60. Refer to Exhibit 11-2. Using the segmented incomestatements, what is the profit margin ratio for the Dish WasherDivision (to the nearest hundredth of a percent)?
a. 30.37%
b. 50.74%
c. 16.70%
d. 49.26%
e. None of the answer choices iscorrect.
61. Refer to Exhibit 11-2. Assume the RefrigeratorDivision has average operating assets totaling $24,000,000 for theyear. What is the division's return on investment (to the nearesthundredth of a percent)?
a. 40.80%
b. 17.00%
c. 24.17%
d. 58.00%
e. None of the answer choices iscorrect.
62. Refer to Exhibit 11-2. Assume the RefrigeratorDivision has average operating assets totaling $24,000,000 for theyear and the company's cost of capital rate is 15 percent. What isthe residual income for the Refrigerator division?
a. $2,200,000
b. $2,580,000
c. $6,400,000
d. $480,000
e. None of the answer choices iscorrect.
63. Refer to Exhibit 11-2. Assume the Dish WasherDivision has average operating assets totaling $6,560,000 for theyear and the company's cost of capital rate is 15 percent. What isthe residual income for the Dish Washer division?
a. $656,000
b. $4,744,000
c. $246,000
d. $2,084,000
e. None of the answer choices iscorrect.
