The Following Information Is Given for the Corn and Oats

question 38

Essay

The following information is given for the Corn and Oats Divisions of Wholesome Grains Corporation.

	Corn	Oats
Sales	$600,000	$300,000
Var. cost of goods sold	200,000	150,000
Fixed manufacturing costs	50,000	40,000
Variable selling	30,000	5,000
Fixed selling (50% allocated)	20,000	4,000
Fixed selling (20% allocated)	50,000	30,000
Assets at book value	600,000	500,000

a. If Wholesome Grains Corporation uses income to evaluate division managers, compute net income that should be used for that purpost given the limited data above.
b. If Wholesome Grains Corporation uses ROI to evaluate division managers and uses historical cost as the investment base, compute the ROI for the Corn and Oats divisions.

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Definitions:

Ionic Frieze

A horizontal band of sculpted or painted decoration found in classical Greek architecture, typically part of the Ionic order.

Parthenon

An ancient temple dedicated to Athena, located on the Acropolis in Athens, Greece; epitomizes the height of classical Greek architecture.

Greeks Depiction

Artistic representations or portrayals of Greek people, gods, or mythological scenes in various forms of art.

Volute

A spiral, scroll-like form characteristic of the ancient Greek Ionic and the Roman Composite capital.