Managerial Accounting-3 Questions due by March 17, 2015.

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EGE1986

Business Finance

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Here are 3 questions for Managerial Accounting due by March 17, 2015. I've provided them in a Word document.

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1. The balance sheet for the Sand Dollar division of Stellar Company shows that for 2011 it had operating assets at the beginning of the year of $250,000 and $300,000 at the end of the year. During the year, the division had $14,000 of net operating income on sales of $450,000. A. What is the ROI of the division? B. If sales were $600,000 and net operating income was $30,000 and operating assets at the end of the year were $350,000, what would ROI be? 2. Bienville Company has two operating divisions, and the financial information for each division for 2010 is: Top Division Bottom Division Sales Average operating assets Net operating income Property, plant and equipment $2,000,000 1,000,000 180,000 475,000 $3,500,000 1,000,000 210,000 400,000 Compute ROI for each division. Which manager seems to be doing the best job? Why? Does ROI necessarily the best measure of the performance of these managers? 3. Magic Lawnmower Company assembles lawnmowers from a number of different parts. Some of those parts are manufactured by Magic Lawnmower and some of the parts are purchased from other companies. The vendor for the blades that Magic Lawnmower uses has just increased the price of blades to $10 per blade for the first 5,000 blades and $9 per blade for all blades ordered during the year in excess of 5,000. Magic Lawnmower expects to use 7,500 blades this year. Magic lawnmower can make the blades for the following unit costs: Direct materials Direct labor Variable manufacturing overhead $3.50 $1.75 $4.25 If Magic lawnmower elects to make the blades rather than buy the blades from its vendor, what are the opportunity costs? If Magic lawnmower elects to make the blades rather than buy them, what are the opportunity costs?
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