ACCOUTING ACC Calculating Average Operating Assets, Margin, Turnover, and Return on Investment

.Calculating Average Operating Assets, Margin, Turnover, and Return on InvestmentEast Mullett Manufacturing earned operating income last year as shown in the following income statement:Sales$531,250Cost of goods soldGross margin280,000$251,250Selling and administrative expense189,600Operating income$61,650Less: Income taxes (@ 40%)Net income24,660$36,990At the beginning of the year, the value of operating assets was $390,000. At the end of the year, the valueof operating assets was $460,000.Required:For East Mullett Manufacturing, calculate the following:1. Average operating assets2. Margin (round to two decimal places)3. Turnover (round to two decimal places)4. Return on investment (round to one decimal place)2.Calculating Cycle Time and VelocityIndy Company has the following data for one of its manufacturing plants:1.Maximum units produced in a quarter (3­month period): 250,000 units2.Actual units produced in a quarter (3­month period): 206,000 units3.Productive hours in one quarter: 25,000 hoursRequired:1. Compute the theoretical cycle time (in minutes)._________________ minutes per unit2. Compute the actual cycle time (in minutes). Round your answer to two decimal places._________________ minutes per unit3. Compute the theoretical velocity in units per hour._________________ units per hour4. Compute the actual velocity in units per hour. Round your answer to two decimal places._________________ units per hour3.Calculating Manufacturing Cycle EfficiencyDelko Company has the following data for one of its manufacturing plants:1.Maximum units produced in a quarter (3­month period): 250,000 units2.Actual units produced in a quarter (3­month period): 191,000 units3.Productive hours in one quarter: 25,000 hours4.Actual cycle time: 7.85 minutes5.Theoretical cycle time: 6 minutesRequired:1. Calculate the amount of processing time and the amount of nonprocessing time. If required, round youranswers to two decimal places.Processing time_________________ minutesNonprocessing time_________________ minutes2. Calculate the MCE. If required, round your answer to nearest whole number._________________ %4.Types of Responsibility CentersConsider each of the following independent scenarios:Required:For each of the below independent scenarios, indicate the type of responsibility center involved (cost,revenue, profit, or investment).a.Terrin Belson, plant manager for the laser printer factory of Compugear Inc., brushed his hair backand sighed. December had been a bad month. Two machines had broken down, and some factoryproduction workers (all on salary) were idled for part of the month. Materials prices increased, andinsurance premiums on the factory increased. No way out of it; costs were going up. He hoped thatthe marketing vice president would be able to push through some price increases, but that reallywasn’t his department._________________b.Joanna Pauly was delighted to see that her ROI figures had increased for the third straight year.She was sure that her campaign to lower costs and use machinery more efficiently (enabling herfactories to sell several older machines) was the reason why. Joanna planned to take full credit forthe improvements at her semiannual performance review._________________c.Gil Rodriguez, sales manager for ComputerWorks, was not pleased with a memo fromheadquarters detailing the recent cost increases for the laser printer line. Headquarters suggestedraising prices. “Great,” thought Gil, “an increase in price will kill sales and revenue will go down.Why can’t the plant shape up and cut costs like every other company in America is doing? Whyturn this into my problem?”_________________d.Susan Whitehorse looked at the quarterly profit and loss statement with disgust. Revenue wasdown, and cost was up—what a combination! Then she had an idea. If she cut back onmaintenance of equipment and let a product engineer go, expenses would decrease—perhapsenough to reverse the trend in income._________________e.Shonna Lowry had just been hired to improve the fortunes of the Southern Division of ABC Inc.She met with top staff and hammered out a 3­year plan to improve the situation. A centerpiece ofthe plan is the retiring of obsolete equipment and the purchasing of state­of­the­art, computer­assisted machinery. The new machinery would take time for the workers to learn to use, but oncethat was done, waste would be virtually eliminated._________________5.Margin, Turnover, Return on Investment, Average Operating AssetsPark Company provided the following income statement for last year:SalesLess: Variable expenses$80,00054,000Contribution margin$26,000Less: Fixed expenses19,600Operating income$6,400At the beginning of last year, Park had $38,690 in operating assets. At the end of the year, Park had$41,310 in operating assets.Required:Compute ROI. Do not round interim calculations, but do round your final answer to two decimal places. Ifrequired, use a minus sign to indicate a negative ROI.ROI = _________________ %6.Residual IncomeThe Home Products Division of Schipper Company had operating income last year of $112,200 andaverage operating assets of $780,000. Schipper’s minimum acceptable rate of return is 10%.Required:Calculate the residual income for the Home Products Division. Round your answer to the nearest dollar.Residual income $ _________________7.Economic Value AddedFalconer Company had net (after­tax) income last year of $12,870,416 and total capital employed of$121,811,860. Falconer’s actual cost of capital was 10%.Required:1. Calculate the EVA for Falconer Company. Enter negative values as negative numbers, if required.$ _________________2. Conceptual Connection: Is Falconer creating or destroying wealth? _________________8.Balanced ScorecardThe following are a number of measures associated with the Balanced Scorecard.Required:1. Classify each performance measure as belonging to one of the following perspectives: financial,customer, internal business process, or learning and growth.a.Number of new customers.b.Percentage of customer complaints resolved with one contact.c.Unit product cost.d.Cost per distribution channel.e.Suggestions per employee.f.Warranty repair costs.g.Consumer satisfaction (from surveys).h.Cycle time for solving a customer problem.i.Strategic job coverage ratio.j.On­time delivery percentage.k.Percentage of revenues from new products.2. Select an additional measure that would be appropriate for each of the four perspectives.Financial_________________Customer_________________Internal business process_________________Learning and growth_________________