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# ACC12 - 12-1 Sales Variable Expenses Contribution Margin...

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12-1 Total Company Weedban Greengrow Sales \$300,000 \$90,000 \$210,000 Variable Expenses \$183,000 \$36,000 \$147,000 Contribution Margin \$117,000 \$54,000 \$63,000 Traceable fixed expenses per year \$66,000 \$45,000 \$21,000 Segment Margin \$51,000 \$9,000 \$42,000 Common Fixed Expenses \$33,000 Net Operating Income \$18,000 12-2 1. Margin = \$600,000/\$7,500,000 = .08 2. Turnover = \$7,500,000/\$5,000,000 = 1.5 3. ROI = .08*1.5 = .12 12-3 Residual income = 600,000 – (2,800,000 * .18) Residual income = 600,000 – 504,000 Residual income = 96,000 12-5 1. Osaka Yokohama 210,000/3,000,000 = .07 720,000/9,000,000 = .08 3,000,000/1,000,000 = 3 9,000,000/4,000,000 = 2.25 Roi = .07*3 = .21 Roi = .08*2.25 .18 2. Osaka Yokohama RI = 210,000 – (1,000,000 *.15) = 60,000 RI = 720,000 – (4,000,000 *.15) = 120,000 4. No because its sales are much larger for Yokohama indicating that it is a much larger division and not better managed. 12-13 1. NOI increase = 40% * \$75,000 = \$30,000 2. A. Total Company Office Chicago Minneapolis Sales \$500,000 100% \$200,000 100% \$300,000 100 % Variable Expenses \$240,000 48% \$60,000 30% \$180,000 60% Contribution Margin \$260,000 52% \$140,000 70% \$120,000

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