12-21

sales 1,040,000,000
less : variable expenses 700,250,000
contribution margin 339,750,000
less : fixed expense 183,750,000
operating income 156,000,000

at the begining of last year , elway had $28300000 in operating a

of the year. Elway had $23700000 in operating ass

Solution : 1. average operating assets = (begining asset + ending ass

= 28,300,000 +
= 26,000,000

2. Margin = operating income / sales

= 156,000,000 /
= 0.15 atau

3. Turnover = sales / average operating assets

= 1,040,000,000 /
= 40

4. ROI = operating income / average operating asset

= 156,000,000 /
= 6
28300000 in operating assets , at the end
700000 in operating assets

gining asset + ending assets)/2

23,700,000 /2

ng income / sales
1,040,000,000
15%

rage operating assets

26,000,000

average operating assets

26,000,000
 E 12 - 22
Year 1 Year 2
Sales $ 148,500,000 $ 162,250,000
Operating income $ 8,910,000 $ 8,112,500
Average Operating Assets $ 337,500,000 $ 405,625,000

1. Margin (Year 1) = operating income / sales

= 8,910,000 / 148,500,000
= 0.06 atau 6%

1. Margin (Year 2) = operating income / sales

= 8,112,500 / 162,250,000
= 0.05 atau 5%

Turnover (Year 1) = sales / average operating assets

= 148,500,000 / 337,500,000
= 0.44

Turnover (Year 2) = sales / average operating assets

= 162,250,000 / 405,625,000
= 0.4

2. ROI (Year 1) = operating income / average operating assets

= 8,910,000 / 337,500,000
= 0.0264

2. ROI (Year 2) = operating income / average operating assets

= 8,112,500 / 405,625,000
= 0.02
s

assets

assets
 E 12 - 24

Diketahui: Conceptual Connection

Net Income (after tax) $ 12,375,400.00 Net Income (after tax)
Total Capital Employed $ 111,754,000.00 Total Capital Employed
Actual Cost of Capital 9% Actual Cost of Capital

1. Calculate the Eva for Falconer Company!

EVA = After Taxes Operating Income - (Actual Percentage Cost of Capital x Total Capital Employee )
EVA = $12.375.400 - (9% x $111.754.000)
EVA = $ 2,317,540.00

2. Is Falconer creating or destroying wealth?

EVA = {($605.000 - (12% x $4.000.000)} + {($315.000-(12% x $3.250.000)}
EVA = $ 50,000.00
Falconer is creating wealth because EVA is positive
 Adam's Division Jefferson's Division
$ 605,000.00 $ 315,000.00
$ 4,000,000.00 $ 3,250,000.00
12% 12%

al Capital Employee )
 E 12 - 26

adam's devision operating income 605000

operating asset 4000000
jefferson's devision operating income 315000
operating asset 3250000
minimum rate of return is 8%

A ) Calculate the Residual Income for the Adam's devision

Residual income = operating income - (minimum rate of return x average operating assets)
= $ 605,000.00 - $ 320,000.00
= $ 285,000.00

B ) Calculate the Residual Income for the Jefferson's devision

Residual income = operating income - (minimum rate of return x average operating assets)
= $ 315,000.00 - $ 260,000.00
= $ 55,000.00
ng assets)

ng assets)
E 12-27
1. which division sets the maximum transfer price? Which division sets the minimum transfer price?
jawab :
Harga transfer maksimum jika transfer dress Divisi Furniture ke divisi Motel sebesar $ 29. Hal ini karena Divisi Furniture telah be
tetapi mengharapkan untuk menjual hanya 40.000 lemari ke pelanggan luar. Dengan demikian ia memiliki kapasitas surplus 50
Oleh karena itu Divisi furniture harus memindahkan lemari pakaian ke divisi Motel dengan biaya produksinya $ 29
Divisi Motel harus menetapkan harga transfer maksimum dengan mengingat bahwa harga maksimum yang dapat ditawarkan k

2. suppose the company policy is that all transfers take place at full cost. What is the transfer price?
jawab :
Harga transfer maksimum jika transfer dress Divisi Furniture ke divisi Motel sebesar $ 14. Hal ini karena Divisi Furniture telah be
tetapi mengharapkan untuk menjual hanya 40.000 lemari ke pelanggan luar. Dengan demikian ia memiliki kapasitas surplus se
Oleh karena itu Divisi Furniture harus mentransfer lemari pakaian ke divisi Motel dengan biaya variabel produksi lemari pakaian

3. CONCEPTUAL CONNECTION do you think that the transfer will occur at the company mandated transfer price? why or why n
jawab :
kemungkinan transfer akan terjadi pada harga transfer yang diamanatkan perusahaan.
Hanya akan ada selisih $ 110.000 dalam perbandingan untuk penjualan beban massal ke Motel, Keuntungan Cepat dan kehilan
a Divisi Furniture telah beroperasi pada kapasitas (50.000 meja rias per tahun)
miliki kapasitas surplus 50.000-40.000 10.000 meja rias yang tidak memiliki permintaan.
uksinya $ 29
yang dapat ditawarkan kepada Divisi Perabotan dengan memperhatikan keuntungan keseluruhan perusahaan.

a Divisi Furniture telah beroperasi pada kapasitas (50.000 meja rias per tahun)
miliki kapasitas surplus sebesar 50.000-40.000 10.000 lemari pakaian yang tidak memiliki permintaan.
el produksi lemari pakaian yaitu $ 14.

nsfer price? why or why not?

ungan Cepat dan kehilangan minimal

 EXERCISE 12-34

Diketahui :
Radio (old project) income
operating assets
Radio (new project ) income
operating assets
The Radio income
operating assets

the minimum required return on investment is 12%

A ) compute ROI if radio project is not undertaken

ROI = operating income / average operating assets
= 725,000 / 3,625,000
= 0.2

B ) compute ROI if radio project alone

ROI = operating income / average operating assets
= 640,000 / 4,000,000
= 0.16

C ) compute ROI if radio project is undertaken

ROI = operating income / average operating assets
= 1,365,000 / 7,625,000
 = 0.1790163934

D ) Compute residual income if radio project is not undertaken

Residual income = operating income - (minimum rate of return x ave
= 725000 - ( 12% x 36
= 290000

e ) Compute residual income if radio project alone

Residual income = operating income - (minimum rate of return x ave
= 640000 - ( 12% x 40
= 160000

F ) Compute residual income if radio project is not undertaken

Residual income = operating income - (minimum rate of return x ave
= 1365000 / ( 12% x 76
= 450000
 725000
3625000
640000
4000000
1365000
7625000

ment is 12%

ting assets

ting assets

ting assets
ndertaken
imum rate of return x average operating assets)
( 12% x 3625000 )

imum rate of return x average operating assets)

( 12% x 4000000 )

not undertaken
imum rate of return x average operating assets)
( 12% x 7625000 )
 E 12 - 35

Year 1 Year 2
Sales $ 10,000,000 $ 9,500,000
Operating income $ 1,200,000 $ 1,045,000
Average Operating Assets $ 15,000,000 $ 15,000,000

1. Compute ROI, margin, turn over for year 1,2,3

Margin (Year 1) = operating income / sales
= 1,200,000 / 10,000,000
= 0.12 atau 12%

Margin (Year 2) = operating income / sales

= 1,045,000 / 9,500,000
= 0.11 atau 11%

Margin (Year 3) = operating income / sales

= 945,000 / 9,000,000
= 0.105 atau 11%

Turnover (Year 1) = sales / average operating assets

= 10,000,000 / 15,000,000
= 0.6666666667

Turnover (Year 2) = sales / average operating assets

= 9,500,000 / 15,000,000
= 0.6333333333

Turnover (Year 3) = sales / average operating assets

= 9,000,000 / 15,000,000
= 0.6

ROI (Year 1) = operating income / average operating assets

= 1,200,000 / 15,000,000
= 0.08

ROI (Year 2) = operating income / average operating assets

 = 1,045,000 / 15,000,000
= 0.0696666667

ROI (Year 3) = operating income / average operating assets

= 945,000 / 15,000,000
= 0.063
2. Suppose that in year 4 the sales and opearting income were achived as expected , but inventories remained at the same

Year 4
Sales $ 10,000,000
Operating income $ 1,200,000
Average Operating Assets $ 15,000,000

Margin (Year 4) = operating income / sales

= 1,200,000 / 10,000,000
= 0.12 atau 12%

Turnover (Year 4) = sales / average operating assets

= 10,000,000 / 15,000,000
= 0.6666666667

ROI (Year 4) = operating income / average operating assets

= 1,200,000 / 15,000,000
= 0.08

3. Suppose that in year 4 the sales and opearting income remained the same as in year 3 , but inventory reductions were a

Year 4
Sales $ 9,000,000
Operating income $ 945,000
Average Operating Assets $ 12,000,000

Margin (Year 4) = operating income / sales

= 945,000 / 9,000,000
= 0.105 atau 11%

Turnover (Year 4) = sales / average operating assets

 = 9,000,000 / 12,000,000
= 0.75

ROI (Year 4) = operating income / average operating assets

= 945,000 / 12,000,000
= 0.07875
4. assume that all expectation for year 4 were realize. Compute the ROI, Margin and turnover

Year 4
Sales $ 10,000,000
Operating income $ 1,200,000
Average Operating Assets $ 12,000,000

Margin (Year 4) = operating income / sales

= 1,200,000 / 10,000,000
= 0.12 atau 12%

Turnover (Year 4) = sales / average operating assets

= 10,000,000 / 12,000,000
= 0.8333333333

ROI (Year 4) = operating income / average operating assets

= 1,200,000 / 12,000,000
= 0.1
 Year 3
$ 9,000,000
$ 945,000
$ 15,000,000

e / sales

e / sales

e / sales

rating assets

rating assets

rating assets

operating assets

operating assets
operating assets

but inventories remained at the same level in year 3 . Compute ROI, margin, and turn over

e / sales

rating assets

operating assets

ar 3 , but inventory reductions were achived as projected. Compute the ROI, Margin and turnover

e / sales

rating assets
operating assets

e / sales

rating assets

operating assets
 E 12 - 36

Diketahui:
Air Conditioner Turbocharger
Outlay $ 750,000.00 $ 540,000.00
Operating Income $ 90,000.00 $ 82,080.00

1. Compute the ROI for each investment project

Air Conditioner, ROI 12%
Turbocharger, ROI 15.2%

2. Compute the budgeted divisional ROI for each of the following four alternatives:
a. The air conditioner investment is made
b. The turbocharger investment is made
c. Both investment is made
d. Neither additional investment is made
With Air With With both
Conditioner Turbocharger investment
Income $ 4,425,000.00 $ 4,417,080.00 $ 4,507,080.00
Assets $ 29,650,000.00 $ 29,440,000.00 $ 30,190,000.00
ROI 14.92% 15.00% 14.93%

3. Which alternative do you think the divisional manager will choose?

The divisional manager will choose the turbocharger

4. Calculate the residual income for each of the following four alternatives!
*minimum required rate of return equal to 14%
Residual Income with Air Conditioner $ 274,000.00
Residual Income with Turbocharger $ 295,480.00
Residual Income with Both Investment $ 280,480.00
Residual Income with Neither investment $ 289,000.00
Manager will choose the Turbocharger, since the residual income is higher for that alternative

5. Calculate the residual income for each of the following four alternatives!
*minimum required rate of return equal to 10%
Residual Income with Air Conditioner $ 1,460,000.00
Residual Income with Turbocharger $ 1,473,080.00
Residual Income with Both Investment $ 1,488,080.00
Residual Income with Neither investment $ 1,445,000.00
Manager will choose the both investment, since the residual income is higher for that alternative
 Neither
Investment
$ 4,335,000.00
$ 28,900,000.00
15.00%

at alternative

that alternative