Exercise G The following data are available for Segment A of ABC Company: Net income of the segment $ 50,000Contribution to indirect expenses 40,000Controllable income by manager 48,000Assets directly used by the manager 360,000Assets under the control of the segment 240,000managerDetermine the return on investment for evaluating (a) the income performance of the manager ofSegment A and (b) the rate of income contribution of the segment. Alternate problem A Swiss Corporation has three production plants (X, Y, and Z). Following is a summary of the results for January 2009: InvestmentPlant Revenues Expenses Base (gross assets)X $ 720,000 $ 300,000 $ 1,440,000Y 960,000 180,000 1,920,000Z 5,040,000 1,920,000 13,200,000a. If the plants are treated as profit centers, which plant manager appears to have done the bestjob?b. If the plants are treated as investment centers, which plant manager appears to have done thebest job? (Assume the plant managers are evaluated by return on investment. )c. Do the results of profit center analysis and investment center analysis give different findings? If so, why?
Originally posted 2018-07-20 14:53:17. Republished by Blog Post Promoter