Question 4: The Medford Burkett Company uses a responsibility reporting system t
ID: 2438217 • Letter: Q
Question
Question 4: The Medford Burkett Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes, Taxis, and Limos. Segment performance is measured using a system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers' bonuses are based in part on the results shown in these reports.
Recently, the company was the victim of a computer virus that deleted portions of the company's accounting records. This was discovered when the current period's responsibility reports were being prepared. The printout of the actual operating results appeared as follows.
Determine the missing amounts.
Planes
Taxis
Limos
Service Revenue
?
450,000
?
Variable Costs
5,000,000
?
320,000
Contribution Margin
?
180,000
380,000
Controllable Fixed Costs
1,500,000
?
?
Controllable Margin
?
70,000
176,000
Average Operating Assets
25,000,000
?
1,600,000
Return on Investment
12%
10%
?
Please show your work so I can study this material! Thank you!
Planes
Taxis
Limos
Service Revenue
?
450,000
?
Variable Costs
5,000,000
?
320,000
Contribution Margin
?
180,000
380,000
Controllable Fixed Costs
1,500,000
?
?
Controllable Margin
?
70,000
176,000
Average Operating Assets
25,000,000
?
1,600,000
Return on Investment
12%
10%
?
Explanation / Answer
Determine missing amount :
Planes Taxis Limos Service Revenue 9500000 450000 700000 Variable Costs 5000000 270000 320000 Contribution Margin 4500000 180000 380000 Controllable Fixed Costs 1500000 110000 204000 Controllable Margin 25000000*12% = 3000000 70000 176000 Average Operating Assets 25000000 700000 1600000 Return on investment 12% 10% 11%Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.