The Ferrell Transportation Company uses a responsibility reporting system to mea

Question

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 $500,300 Service revenue Variable costs Contribution margin Controllable fixed costs Controlable margin Average operating assets Return on investment 5,506,900 302,100 251,700 454,998 1,496,400 77,000 214,998 25,002,900 1,535,700 13% 10%

Explanation / Answer

Planes Taxis Limos Service revenue a $10,253,677 $500,300 g $757,098 Variable costs      5,506,900 d         248,600       302,100 Contribution margin b      4,746,777         251,700       454,998 Controllable Fxed costs      1,496,400 e         174,700 h       240,000 Controllable margin c      3,250,377           77,000       214,998 Average operating assets    25,002,900 f         770,000    1,535,700 Return on investment 13% 10% i 14% Calculation hint: alphabets are given in order the answer is first arrived. c 25002900 x 13% = 3250377 b 3250377+1496400 = 4746777 a 4746777+5506900 = 10253677 f 77000/10% = 770000 e 251700-77000 = 174700 d 500300-251700 = 248600 g 302100+454998 = 757098 h 454998-214998 = 240000 i 214998/1535700 = 14%

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