week6 - ff Learning Exercise Windows Internet Explorer g...

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Unformatted text preview: ff Learning Exercise - Windows Internet Explorer g, httpSIHde. \/ Here's howwe would set upthistype of problem The basic steps ofpreparing a segment contribution margin income statement are as sales . follows: Less: variable expenses Equals Contribution Margin - Identify sales for each product. Less: Traceable fixed expenses - Identmrvariable expenses foreach product. Equals Product line segment margin - ldentifytraceable fixed expenses for each _ Less: Common fixed expenses not product. traceable to products - Calculate segmentmargin (see basic format on Euals Net oeratln income whiteboard). - Apply common fixed expenses to company marginto get net operating income. Continue f." Learning Exercise - Windows Internet Explorer I E] https:,l,ldms.devry.edu ital company ROI = \/ Greatjobl Continue onto the next stepto reviewthe calculation oiROl. To summarize ROI, you will neecl to perform the following: - Calculate margin. Margin is netoperating income I Sales - Calculate turnover. Turnover is Salesi Average operating assets - Calculate ROI. ROI is margin*turnover. RC” = my Operating income saies sales avg operating assets at One last item — sometimes there will be an opportunityto calculate ROI Llirectlir ratherthan havingto first calculate margin and thenmmm’er In this situation, sales would cancel each otherout‘ so you are IeflWith thefollowmgformula: You can calculate ROI clirectly bytaking net operating income! average operating assets. See the example on the whiteboard. _ _ ROI = net operating incomeIavg operating assets That is the end of this walk-through. B Close {I Learning IEer is-z- - Windows Internet Exploler El https:,t,tdms.deyry.edu,ldmsIWelJPagesIHashfcontent studentflearningExercise.aspx?courseID=5030133&userID=3681596&dssID=19&roletype=STUD&courseCode= ital company 1 Walk meth asimilar problem Compute theresidualincome Ignoretheimpactofincome taxes in your calculation. Before we pegin,would you like an overview ofhowto set up the problemrorcompletion? y/HEI’B'S a reminder. To compute the residual income, you would needto calculate the minimum required return ofthe company (avg operating assets * minimum required rate of return) and subtractthat amountfromthe netoperating Income. Continue /_ :‘ t'-'1anageiial Accountin. .. ,r'_ 1‘ Learning f." Learning Exercise - Windows Internet Exploier g;https:Iidms.devry.eduldmsi'WeoPagesi'flashIcontent,lstudenti'learningExercise.aspx?courseID=5030133&userID=3681596&dssID=19&roletype=STUD&courseCode— View “mun; ® Walk meth asimilar problem A UUUU try! i-u—Jriierriui::rI resiuuai iriuurrie l5 Laiuuiaieu as iiei operating income manS minimum required return. Whatis the residual income ofBuckeye Inc? «i603 Residualincome = $ 400000 Hinimumrequir _ I sidimi Income \/ GUUEI Jub. operating income rr . . . . Residual income To summarize‘ when attempting to determine reSIdual income‘ you Wm needm pemrmme m‘luwmg: Net operating Income minus minimum requued return - lfnot given, determine the appropriate minimum rate ofreturn - Calculate the minimum regUIred return (average operating Average Operating assets* mimmum rate Urretum assets minimum rate of return) - Calculate residual income. Residual income is net operating income minus minimum regUired return Minimum required return Continue Full Tilt Fl Et‘ i‘ start f.‘ Learning Exercise - Windows Internet Explnnler _ — V g; https:Ildmsdsvry.edu,Idmsl'WebPages!HashlcontentlstudentllearningExercise.aspx?courseID=5030133&userID=3681596%551D=19&roletype=STUDBuzourseCode= View mgng ® .7 - Welcome, Brandon Davis 0. Managing Constraints SunJun12 2o11 L? palm psi yuan, in aa iunuwa. Direct Materials Increase netoperating income by$120000 Direct Labor man-Lu u' Vanable ManUfaCturmg overhead Decrease net operating income by $120,000 b"""""‘ m“ Fixed Manufacturing Overhead, Traceable $ 180,000 Fixed Manufacturing-Overhead, Common Decrease “Emperafinginwme by $30300 IN,“ (allocated on baSIs oflabor-hours) $ 135.000 ODOI'DMIMOMO Unit Product Cost Increase netoperating income by$30.000 accounting far Responsibilltv and Decisions CEXIs An outside supplier has offered to supplvthe parts to the Westervllle Auto Companvforonlv $12.00 perpart. Fifly percent ofthetraceable fixed manufacturing cost is supervisor salaries and othercosts that can be eliminated ifthe parts are purchasedThe other 50% ofthe traceable fixed manufacturing costs consist ofdepreciation and specIaI eguipmentthat has GfeatJUb! HaVing the abiliNtfl analyze WhEIhEVVDU ShDUIEl "12 no resale value. The decISIon to puythe parts from the outSIcIe supplierwould have no effect or buy a product Is an Importanttool In pusmess decISIon on the common fixed costs ofthe company, andthe space being used to produce the parts making would otherwise be idle. . . . Please proceed to the next Learning Exercise. Ignore the Impact oflncome taxes Inyour caIcuIatIon. I PageSofS' Words-0 U Full Tilt F: EI‘ J Pagemuffl | Worusm I | .' start K" l'-'lan.agsrial illugzujuritin. .. f: Learning 3'." Learning Exercise - Windows Internet EXPIOIET _ V g; https:Iidmsdevrv.edu,Idmsi'WebPages!HashlcontentistudentilearningExercise.aspx?courseID=5030133&userID=3681596&dssID=19&roletvpe=STUD&courseCode— View “mun; ® Walk meth asimilar problem El «Greatjob! Assuming a $12 price perT—shirt, how much incremental revenue would he recognized from the special order? Incremental revenue = ii Direct materials Direct labor Variable manufacturing overhead X Goodtrv! Incremental revenue from the special order Fixed manufacturing overhead would be $24,000 ($12 ’ 2,000). Variable selling and admin. expenses Fixed sellin and admin. exenses Nowthatwe knowthe incremental revenue from the special order. now much would the Incremental cost ofthe specIaI Totalfor2,000 order be“) Per Unit T-shirts Incremental revenue 3% 12.00 $ 24.000 Incremental cost : $ Total incremental cost '? Incremental net operating Income Answer Full Tilt F: EI‘ i‘ start f." Learning Exercise - Windows Internet Explmer g;https:Iidms.devry.eduldmsi'WebPagesi'flashlcontent,lstudentflearningExercise.asox?courseID=5030133&userID=3681596%551D=19&roletype=STUD&courseCode— _ View “mun; ® Walk meth asimilar problem El Total incremental cost = $ JGoodjob! materials labor Nowthatwe have calculated incremental revenue and le manulactun'ng o‘ Incremental costforthe speCIal order, let's answerthe Totalfor2,000 manufaclurirlg um question posed forthe problem: Should the speClal order T-shirts le sellll‘lg and admi be accepted? What would be the impact to monthly profits? Incremental TBVBHUB BBIII" ind idmmw Incremental costs: Variable costs: 0 No; the special order decreases monthly profits by $0,000 Direct materials Directlabor : I Variable manufacturing overhead mnémnga Variable selling and admlnistraliye Totalyariable cost - Ina operang‘nl 0 Yes; the special order increases profits by $24,000 Fixed casts additional fixed cost due to special order 0 No; the special order decreases profits by $18,000 Total incremental cost 0 Yes;the special order increases monthly profits by $6,000 Incremental net operatlng income Answer 501'5' Full Tilt F: Et‘ ,_7, fl; start ,_ .:‘ .- l f: Learning fl; Learning Exercise - Windows Internet Explorer I I - _ V g, https:,l',l'dms.devry.edu,ldmsIWebPages,I'HashfcontentistudentllearningExercise.asox?courseID=SDSD133&userID=3681596&dssID=19&roletype=STUDB<courseCode=AC lyre“, lAden; ‘7 Welcome, Brandon Davis C. Managing Constraints SunJun12 2o11 fir] 2.] a a ExelciseS The Buckeye Company produces T-shirts promoting Ohio State University to various re ailers. The costs ofproducing and selling a Single T-shirt at the company's current activity level of1D.DDU units per month are: 0 No, would decrease monthly profits by $11,000 LI) Yes, would increase montth profits by $1 1 .000 Direct materials 0 No, no impact on monthly profits - Direct labor his mamiaclurimovr . I I1 Variable manufacturing overhead 0 Yes. no impacton monthly profits 51:35:” am ‘ Fixed manufacturing overhead was: Variable selling and admin. expenses N ianalnrred cost duetn ( ) one ofthe above __ ed sellin and admin exenses crewmach .. lelnet operI'ng 'm .il Accounting for Responsibility and Decisions CBxIs The normal selling price is $18 per unit. The company's capacity is 1 2,000 units per month. Due to Ohio State University participating in the BCS National Championship game, an order has been receivedfrom a retailerior ZUEIEI additionalT—shirts at $14 perunit. This orderwould not affect regular sales and would not change the company's total fixed costs. Ignore the impact ofincome taxes in your calculation. Shouldthe orderbe accepted? Whatwould be the impacton monthly profits? Select your choice. then click Check Answer. 6 M6 Wordsfl Close I _= I Walk me through agimilar problem Check Answer I} more v Full Tilt Fr er ._— IJI: start I ,C‘ Learning K; Learning Exercise - Windows Internet Explorer . — g, https:Ildms.devry.eduldmsl'WebPagesl'flashIcontent,lstudentflearningExercise.aspx?courseID=5030133&userID=3681596%551D=19&roletype=STUD&courseCode Imam lAden; ‘7 Welcome, Brandon Davis C. Managing Constraints SunJun12 2o11 fir] 2.] 3.] @ Exerciset Natlonwide Manufacturing Company manufactures three products from a common input in a jointprocessing system. Joint processlng costs‘ up to the spllt—ofi point. total $200,000. The company allocates these costs to the jointproducts on the basis oftheirtotal sales value 0 Products KandZshould be processed further, but not Product‘rr atthe spllt—ofi polnt These sales values are as follows: Product X. MUD-DUO? Producw- $190300? Pmdmtz- $120300 0 Products KandYshould be processed further, but not Produth 0 Products YandZshould be processed further, but not ProductX Each product may be sold atthe split-offpoint or processed further. Additional processing requires no special equipmentorfacilities. The additlonal annual processing costs and sales value aflerfurther processingfor each productare shown below: 0 None otthe above 0 Products X, Y‘ and Z should be processed further Additional Processlnq Costs SalesValue 55 F0 DEIU SE 180 EDD 80 .000 250 .000 211,000 150 EDD .35! JAccountinu for Responsibillty and Decisions C4xls .l Which product orproducts should be sold atthe splltiofipoint, and S I d h . th I. kCh kA whlch products should be processedfurther? 55 W” D'CE' enc'c 5° “swer' T of? Wordsfl I _= I Wallr me through agimilar problem Check Answer I} 100% v Full Tilt F: er F— IJI: sta l1 m {3 Learning ...
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