INVESTMENT CENTRE PROBLEMS
ROI = Operating Income / Average Operating Assets (both current and fixed assets)
ABC Co has 3 divisions
TOTAL OPERATING ASSETS
No, the school knapsacks should not be discontinued. The calculations are:
Contribution margin lost if the knapsacks are
Less fixed costs that can be avoided if the
knapsacks are discontinued:
Salary of the product
Chem Company - Solution
i) Net Realizable Value Method - Sales Value
Sales Value for each product is calculated as follows:
Cash Flow Analysis
Selling price /100 kg
Less: Variable Costs
Management Control System is ineffective
It does not lead to payment of bonuses, and managers are discouraged
New bonus system is proposed
Background / Environment
IE is a high-tech company operating in many business areas; d
Investment in new equipment
Salvage from sale of the old equip
Net annual cash receipts
Link company makes two models of connectors, Basic and Super.
Both connectors are manufactured in two departments: Forming and Finishing.
Forming has a maximum capacity of 240 labour hours.
Finishing has a maximum capacity of 480 labour
Shuman Automobile, Inc.
Class discussion focussed on these questions.
What has happened, and why is it causing problems?
Be sure you get at the root of the actual cause of the problems, not just
the symptoms. What change has been made, and how is i
Joint Product Costs and Sell or Process Further
3372 Exam 3 Study Sheet
Make or Buy
Accept or Reject Special Order
Name: Jiangyilun (Daniel) Pan
Relevant Costs and Benefits:
Incremental costs of making the
product (Variable and Fixe
This solution is similar to the one we did in class; however I had added a calculation to the NPV table
for the increase in managers salary after year 1. If sales go up by $81,000, then the store managers
salary will go up by 20% of $81,000. The process i