Exercise 24-19 The Ferrell Transportation Company uses a responsibility reportin
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Question
Exercise 24-19 The Ferrell Transportation 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 pieces of information below. (Round intermediate calculations and final answers to 0 decimal places, e.g. 1,255.) Planes Taxis Limos Service revenue $502,400 Variable costs Contribution margin Controllable fixed costs Controllable margin Average operating 5,509,100 299,700 249,300 464,915 1,499,300 80,000 222,915 24,999,000 1,486,100 assets Return on investment 14 % 11%Explanation / Answer
Contribution margin=Service revenue-Variable costs
Contribution margin-Controllable fixed costs=Controllable margin
ROI=Controllable margin/Average operating assets
Planes Taxis Limos Service revenue 10508260 502400 764615 VC 5509100 253100 299700 Contribution margin 4999160 249300 464915 Controllable fixed costs 1499300 169300 242000 Controllable margin 3499860 80000 222915 Average operating assets 24,999,000 727,273(Approx) 1,486,100 ROI 14% 11% 15%Related Questions
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