Alexander Bruce and Jonathon Wayne Are Managers of Two Product

question 13

Essay

Alexander Bruce and Jonathon Wayne are managers of two product lines for Gotham Incorporated.One of them is a candidate for promotion based on performance.Using the following data:
a.Calculate the residual income (assume a target income of 10% return on assets)and the investment center return on assets.
b.Indicate which manager should be recommended for promotion and why.
$\begin{array}{lrr}& \underline { \text { Bruce }} & \underline { \text { Wayne } } \\\text { Revenue } & \$ 205,000 & \$ 270,000 \\\text { Costs } & 189,000 & 232,000 \\\text { Average assets } & 300,000 & 290,000\end{array}$

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Definitions:

Creating Value

Refers to the process of enhancing or adding features to a product or service to increase its perceived worth to consumers or stakeholders.

Marketing Mix

The combination of factors that can be controlled by a company to influence consumers to purchase its products, typically summarized as product, price, place, and promotion.

Advertising Campaign

A series of coordinated advertisements with a unified theme or message, aimed at promoting a product, service, or brand.

Marketplace

A venue, either physical or digital, where buyers and sellers come together to exchange goods and services.