Types of Responsibility Centers
For each of the independent scenarios, indicate the type of responsibility center involved (cost, revenue, profit, or investment).
Cornerstone Exercise 12-13 (Algorithmic)
East Mullett Manufacturing earned operating income last year as shown in the following income statement:
At the beginning of the year, the value of operating assets was $390,000. At the end of the year, the value of operating assets was $460,000.
For East Mullett Manufacturing, calculate the following:
eBookeBookeBookeBook SpreadsheetSpreadsheetSpreadsheetSpreadsheetExercise 12-20
Margin, Turnover, Return on Investment
You may use the attached spreadsheet to help you complete this activity, but you are not required to do so. You will find the spreadsheet by clicking on the link in the drop-down menu above.
Pelak Company had sales of $30,000,000, expenses of $27,600,000, and average operating assets of $6,000,000.
1. Compute the operating income.
2. Compute the margin (as a percent) and turnover ratio.
3. Compute the ROI as a percent.