Accounting Business Reporting for Decision Making

596 Accounting: Business Reporting for Decision Making

14.25  LO3

The following data relate to the Chinese Division of Chee Incorporated.

Sales

Direct variable costs

Direct fixed costs

Average invested capital

Required rate of return

$

$

$

$

180 000

60 000

40 000

200 000

20%

Required

Determine:

a. the return on investment b. the residual income.

14.26   LO4

For each of the following stakeholder groups give an example of an eco-efficiency indicator.

a. shareholders

b. government

c. top management

d. site management

e. project management

f. divisional management

g. product management.

14.27   LO3

A division reports divisional margin/profit of $180 000, residual income of $36 000 and an

investment for the period of $1 440 000. What is the minimum return being required by management?

14.28   LO3

A division has profit of $40 500, sales of $495 000 and an investment base of $225 000. If the

required charge for capital is 18 per cent, determine:

a. the profit margin

b. the asset turnover

c. the return on investment

d. the relationship between the three measures in parts (a) to (c)

e. the residual income.

14.29   LO3

A segment of Owl Holdings reports sales of $560 000 and a profit of $120 000. The data below

also relate to the segment of Owl Holdings.

Total assets

Accumulated depreciation

Net assets book value

Current market value

$

$

$

$

1 300 000

300 000

1 000 000

2 500 000

Required

Determine the return on investment if the investment base is valued at:

a. original cost b. written-down value c. market value.

14.30   LO1

For each of the five perspectives of the balanced scorecard, list two possible objectives, a measure

and a driver. Arrange your answer as follows.

Objective Measure Driver

Financial perspective

Customer

Internal    operations

Innovation  and  improvement

Non-market perspective