The Division a of Standard Products Is Planning Its 2019

question 58

Essay

The Division A of Standard Products is planning its 2019 operating budget. Average operating assets of $1,500,000 will be used during in the division during the year and per-unit selling prices are expected to average $100. Variable costs of the division are budgeted at $400,000, while fixed costs are set at $250,000. The company's required rate of return for purposes of calculating residual income (RI) is 18%.

Required:
1. Compute the sales volume (in units) necessary for Division A to achieve a 20% ROI in 2019.
2. The division manager receives a bonus of 50% of residual income (RI). What is her anticipated bonus for 2019 for the division manager, assuming she achieves the 20% ROI target specified in part (1)?

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Definitions:

Policy Assessment

The process of evaluating the effectiveness, outcomes, and impacts of public policies.

Social Policy Practice

The application of social policy principles and theories in real-world settings, often involving the development and implementation of programs aimed at improving societal welfare.

Data Gathering

The process of collecting information and facts for the purpose of analysis to support decision-making or research.

Interviews

A method of gathering information by asking questions verbally, often used in research, journalism, or employment selection.