Description
Complete Problems 12-41 and 13-42 in the textbook.
Both of these case assignments should be prepared in a Word document with embedded Excelspreadsheets for relevant calculations and supporting schedules. The response for Problem 12-41 should be a minimum of 250 words.
Please note, you must show your work in Excel, which includes providing the formulas in the cells, not just the summary value. You may not earn full points if you do not show your work in detail.
Save your assignment as Lastname_FirstnameACC650_T6.docx.
APA style is not required, but solid academic writing is expected.
You are required to submit this assignment to Lopeswrite.
USE TEMPLATES
APA
Memorandum
Date:
To:
From:
Subject:
The Waikiki Sands Hotel
The Grounds and Maintenance Department and the Housekeeping and Custodial Department
The Food and Beverage Department
The Recreational Services Department
The Hospitality Department
.
1.
Current ROI of the Northeast Division:
Sales revenue……………………………………
Less: Variable costs
Fixed costs………………………………..
Income……………………………………………..
ROI = Income ÷ invested capital
Northeast’s ROI if competitor is acquired:
Sales revenue
Less: Variable costs
Fixed costs
Income………………………………………………
ROI = Income ÷ invested capital
2.
3.
An examination of the competitor’s financial statistics reveals the
following:
Sales revenue……………………………………..
Less: Variable costs ……..
Fixed costs ………………………………..
Income………………………………………………
ROI = Income ÷ invested capital
4.
Sales revenue
Less: Variable costs ………………
Less: Variable costs ………………
Fixed costs …
Income………………………………………………
ROI = Income ÷ invested capital
5.
Current residual income of the Northeast Division:
Divisional profit………………………………………………
Less: Imputed interest charge ……
Residual income……………………………………………..
Residual income if competitor is acquired:
Divisional profit ………………
Less: Imputed interest charge……………
Residual income…………………………………………
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34
C)
III
Problem 13-42
ROI and Residual Income;
Investment Evaluation
(LO 13-2, 13-3, 13-4, 13-8)
Megatronics Corporation, a massive retailer of electronic products, is organized in four separate divi-
sions. The four divisional managers are evaluated at year-end, and bonuses are awarded based on ROI.
Last year, the company as a whole produced a 13 percent return on its investment.
During the past week, management of the company’s Northeast Division was approached about the
possibility of buying a competitor that had decided to redirect its retail activities. (If the competitor is
acquired, it will be acquired at its book value.) The data that follow relate to recent performance of the
Northeast Division and the competitor:
3. Income: $150,000
5. Current residual income
of the Northeast Division:
$148,000
B
Northeast Division
Sales
Variable costs
Fixed costs
Invested capital
$8,400,000
70% of sales
$2,150,000
$1,850,000
Competitor
$5,200,000
65% of sales
$1,670,000
$625,000
Chapter 13 Investment Centers and Transfer Pricing
587
Management has determined that in order to upgrade the competitor to Megatronics’ standards, an
additional $375,000 of invested capital would be needed.
Required: As a group, complete the following requirements.
1. Compute the current ROI of the Northeast Division and the division’s ROI if the competitor is
acquired.
2. What is the likely reaction of divisional management toward the acquisition? Why?
3. What is the likely reaction of Megatronics’ corporate management toward the acquisition? Why?
4. Would the division be better off if it didn’t upgrade the competitor to Megatronics’ standards?
Show computations to support your answer.
5. Assume that Megatronics uses residual income to evaluate performance and desires a 12 percent
minimum return on invested capital. Compute the current residual income of the Northeast
Division and the division’s residual income if the competitor is acquired. Will divisional management
be likely to change its attitude toward the acquisition? Why?
Problem 13-43
ROI and Performance
Evaluations
(LO 13-2, 13-4, 13-8)
Kenneth Washburn, head of the Sporting Goods Division of Reliable Products, has just completed a
miserable nine months. “If it could have gone wrong, it did. Sales are down, income is down, inventories
are bloated, and quite frankly, I’m beginning to worry about my job,” he moaned. Washburn is evaluated
on the basis of ROI. Selected figures for the past nine months follow.
с
1. Capital turnover: 80%
Sales
Operating income
$4,800,000
360,000
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C)
III
540
Chapter 12 Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard
The following partial organization chart is an extension of Exhibit 12–1 for Aloha Hotels and Resorts.
Problem 12-41
Designating Responsibility
Centers; Hotel
(LO 12-2)
Waikiki Sands Hotel
B
Grounds and
Maintenance
Department
Housekeeping and
Custodial
Department
Recreational
Services
Department
Hospitality
Department
Food and
Beverage
Department
Front
Desk
Bell
Staff
Guest
Services
Each of the hotel’s five main departments is managed by a director (e.g., director of hospitality).
The Front Desk subunit, which is supervised by the front desk manager, handles the hotel’s reserva-
tions, room assignments, guest payments, and key control. The Bell Staff, managed by the bell captain,
is responsible for greeting guests, front door service, assisting guests with their luggage, and deliver-
ing room-service orders. The Guest Services subunit, supervised by the manager of Guest Services, is
responsible for assisting guests with local transportation arrangements, advising guests on tourist attrac-
tions, and such conveniences as valet and floral services.
Required: As an outside consultant, write a memo to the hotel’s general manager suggesting a
responsibility-center designation for each of the subunits shown in the organization chart above. Justify
your choices.
Rocky Mountain General Hospital serves three counties in Colorado. The hospital is a nonprofit organi-
zation that is supported by patient billings, county and state funds, and private donations. The hospital’s
organization is shown in the following chart.
Problem 12-42
Preparation of Performance
Reports; Hospital
(LO 12-3)
1. Rocky Mountain General
Hospital, total cost, flexible
budget, August: $582,700
Rocky Mountain General Hospital
с
EX
5
General
Medicine
Surgical
Division
Medical
Support
Dinicion
Administrative
Division
Disioon
Purchase answer to see full
attachment
Date:
To:
From:
Subject:
The Waikiki Sands Hotel
The Grounds and Maintenance Department and the Housekeeping and Custodial Department
The Food and Beverage Department
The Recreational Services Department
The Hospitality Department
.
1.
Current ROI of the Northeast Division:
Sales revenue……………………………………
Less: Variable costs
Fixed costs………………………………..
Income……………………………………………..
ROI = Income ÷ invested capital
Northeast’s ROI if competitor is acquired:
Sales revenue
Less: Variable costs
Fixed costs
Income………………………………………………
ROI = Income ÷ invested capital
2.
3.
An examination of the competitor’s financial statistics reveals the
following:
Sales revenue……………………………………..
Less: Variable costs ……..
Fixed costs ………………………………..
Income………………………………………………
ROI = Income ÷ invested capital
4.
Sales revenue
Less: Variable costs ………………
Less: Variable costs ………………
Fixed costs …
Income………………………………………………
ROI = Income ÷ invested capital
5.
Current residual income of the Northeast Division:
Divisional profit………………………………………………
Less: Imputed interest charge ……
Residual income……………………………………………..
Residual income if competitor is acquired:
Divisional profit ………………
Less: Imputed interest charge……………
Residual income…………………………………………
Chrome
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399.41 MB
63%
Sat 3:06 PM
Brad VandeLune
Student Portal | Main
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Performance Measures | Loud X
Grand Canyon University – Dic X
managerial_accounting_creati x
Carhartt Canvas Work Dungar x
Brad
> C
Secure https://viewer.gcu.edu/mqBcBY
Apps AdvoCare
Apple iCloud
Yahoo!
News
Popular
Imported From Safari
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sim market
Other Bookmarks
–
85 %
617 of 848
a
34
C)
III
Problem 13-42
ROI and Residual Income;
Investment Evaluation
(LO 13-2, 13-3, 13-4, 13-8)
Megatronics Corporation, a massive retailer of electronic products, is organized in four separate divi-
sions. The four divisional managers are evaluated at year-end, and bonuses are awarded based on ROI.
Last year, the company as a whole produced a 13 percent return on its investment.
During the past week, management of the company’s Northeast Division was approached about the
possibility of buying a competitor that had decided to redirect its retail activities. (If the competitor is
acquired, it will be acquired at its book value.) The data that follow relate to recent performance of the
Northeast Division and the competitor:
3. Income: $150,000
5. Current residual income
of the Northeast Division:
$148,000
B
Northeast Division
Sales
Variable costs
Fixed costs
Invested capital
$8,400,000
70% of sales
$2,150,000
$1,850,000
Competitor
$5,200,000
65% of sales
$1,670,000
$625,000
Chapter 13 Investment Centers and Transfer Pricing
587
Management has determined that in order to upgrade the competitor to Megatronics’ standards, an
additional $375,000 of invested capital would be needed.
Required: As a group, complete the following requirements.
1. Compute the current ROI of the Northeast Division and the division’s ROI if the competitor is
acquired.
2. What is the likely reaction of divisional management toward the acquisition? Why?
3. What is the likely reaction of Megatronics’ corporate management toward the acquisition? Why?
4. Would the division be better off if it didn’t upgrade the competitor to Megatronics’ standards?
Show computations to support your answer.
5. Assume that Megatronics uses residual income to evaluate performance and desires a 12 percent
minimum return on invested capital. Compute the current residual income of the Northeast
Division and the division’s residual income if the competitor is acquired. Will divisional management
be likely to change its attitude toward the acquisition? Why?
Problem 13-43
ROI and Performance
Evaluations
(LO 13-2, 13-4, 13-8)
Kenneth Washburn, head of the Sporting Goods Division of Reliable Products, has just completed a
miserable nine months. “If it could have gone wrong, it did. Sales are down, income is down, inventories
are bloated, and quite frankly, I’m beginning to worry about my job,” he moaned. Washburn is evaluated
on the basis of ROI. Selected figures for the past nine months follow.
с
1. Capital turnover: 80%
Sales
Operating income
$4,800,000
360,000
Chrome
File
Edit
View
History Bookmarks
People
Window
Help
602.50 MB
64%
Sat 3:04 PM
Brad VandeLune a
Student Portal | Main
Х
Performance Measures | Loud X
Grand Canyon University – Dic x
managerial_accounting_creati x
Carhartt Canvas Work Dungar x
Brad
E → С
Secure https://viewer.gcu.edu/mqBcBY
Apps AdvoCare
Apple iCloud
Yahoo!
News
Popular
Imported From Safari
GCU Login
sim market
Other Bookmarks
–
100 %
570 of 848
a
C)
III
540
Chapter 12 Responsibility Accounting, Operational Performance Measures, and the Balanced Scorecard
The following partial organization chart is an extension of Exhibit 12–1 for Aloha Hotels and Resorts.
Problem 12-41
Designating Responsibility
Centers; Hotel
(LO 12-2)
Waikiki Sands Hotel
B
Grounds and
Maintenance
Department
Housekeeping and
Custodial
Department
Recreational
Services
Department
Hospitality
Department
Food and
Beverage
Department
Front
Desk
Bell
Staff
Guest
Services
Each of the hotel’s five main departments is managed by a director (e.g., director of hospitality).
The Front Desk subunit, which is supervised by the front desk manager, handles the hotel’s reserva-
tions, room assignments, guest payments, and key control. The Bell Staff, managed by the bell captain,
is responsible for greeting guests, front door service, assisting guests with their luggage, and deliver-
ing room-service orders. The Guest Services subunit, supervised by the manager of Guest Services, is
responsible for assisting guests with local transportation arrangements, advising guests on tourist attrac-
tions, and such conveniences as valet and floral services.
Required: As an outside consultant, write a memo to the hotel’s general manager suggesting a
responsibility-center designation for each of the subunits shown in the organization chart above. Justify
your choices.
Rocky Mountain General Hospital serves three counties in Colorado. The hospital is a nonprofit organi-
zation that is supported by patient billings, county and state funds, and private donations. The hospital’s
organization is shown in the following chart.
Problem 12-42
Preparation of Performance
Reports; Hospital
(LO 12-3)
1. Rocky Mountain General
Hospital, total cost, flexible
budget, August: $582,700
Rocky Mountain General Hospital
с
EX
5
General
Medicine
Surgical
Division
Medical
Support
Dinicion
Administrative
Division
Disioon
Purchase answer to see full
attachment
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