The Coffee Division of New Zealand Products Is Planning the 2019

question 34

Essay

The Coffee Division of New Zealand Products is planning the 2019 operating budget.Average operating assets of $1 500 000 will be used during the year and unit selling prices are expected to average $100 each.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 is 18%.
Required:
a.Compute the sales volume necessary to achieve a 20% ROI.
b.The division manager receives a bonus of 50% of residual income.What is his anticipated bonus for 2019,assuming he achieves the 20% ROI from part (a)?
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Definitions:

Management's Functions

The core roles and responsibilities of management, including planning, organizing, leading, and controlling organizational resources.

Planning

The method of establishing objectives, formulating strategies, and detailing the tasks and timelines to achieve these objectives.

Accountability

The obligation of individuals or organizations to account for their activities, accept responsibility for them, and disclose the results in a transparent manner.

Internal Reports

Documents prepared within an organization for strategic decision-making, performance evaluation, and operational control, not for external stakeholders.