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 assets , at the end
of the year. Elway had $23700000 in operating assets

3. Turnover = sales / average operating assets

= 1,040,000,000 / 26,000,000

= 40

4. ROI = operating income / average operating assets

= 156,000,000 / 26,000,000
= 6
 Solution : 1. average operating assets = (begining asset + ending assets)/2
= 28,300,000 + 23,700,000
= 26,000,000

2. Margin = operating income / sales

= 156,000,000 / 1,040,000,000
= 0.15 atau 15%

rating assets , at the end

ting assets

ets

assets
ding assets)/2
/2
E12-22

Year 1 Year 2
Sales $ 148,500,000 $ 162,250,000
Operating Income $ 8,910,000 $ 8,112,500
Averange Operating Assets $ 337,500,000 $ 405,625,000

1. Compute the margin and turnover ratios for each year

Year 1 Year 2
Operating Income $ 8,910,000 $ 8,112,500
MARGIN =
Sales $ 148,500,000 $ 162,250,000
6% 5%
Year 1 Year 2
Sales $ 148,500,000 $ 162,250,000
TURNOVER =
Average Operating Asset $ 337,500,000 $ 405,625,000
44% 40%

2. Compute the ROI for the Contruction Division for each year

Year 1 Year 2

ROI = Margin X Turnover 3% 2%

 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
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
ransfer price?

ni karena Divisi Furniture telah beroperasi pada kapasitas (50.000 meja rias per tahun)
ia memiliki kapasitas surplus 50.000-40.000 10.000 meja rias yang tidak memiliki permintaan.
ya produksinya $ 29
ksimum yang dapat ditawarkan kepada Divisi Perabotan dengan memperhatikan keuntungan keseluruhan perusahaan.

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

ted transfer price? why or why not?

l, Keuntungan Cepat dan kehilangan minimal

perusahaan.
 EXERCISE 12-34

the minimum required retur

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
= 0.179016393

D ) Compute residual income if radio project is not undertaken

Residual income = operating income - (minimum rate of return x average operating assets)
= 725000 - ( 12% x 3625000 )
= 290000

e ) Compute residual income if radio project alone

Residual income = operating income - (minimum rate of return x average operating assets)
= 640000 - ( 12% x 4000000 )
= 160000

F ) Compute residual income if radio project is not undertaken

 Residual income = operating income - (minimum rate of return x average operating assets)
= 1365000 / ( 12% x 7625000 )
= 450000
 Diketahui :
Radio (old project) income 725000
operating assets 3625000
Radio (new project ) income 640000
operating assets 4000000
The Radio income 1365000
operating assets 7625000

the minimum required return on investment is 12%

return x average operating assets)

( 12% x 3625000 )

return x average operating assets)

( 12% x 4000000 )
return x average operating assets)
( 12% x 7625000 )
P12-35

Year 1 Year 2 Year 3

Sales $ 10,000,000 $ 9,500,000 $ 9,000,000
Operating Income $ 1,200,000 $ 1,045,000 $ 945,000
Average Assets $ 15,000,000 $ 15,000,000 $ 15,000,000

1. Compute the ROI, MARGIN and TURNOVER for 1,2 and 3

Rumus :

Operating Income
MARGIN =
Sales

YEAR 1 YEAR 2
ROI 8.00% 6.97%
MARGIN 12.00% 11.00%
TURNOVER 66.67% 63.33%

2. Compute the expected ROI , margin and turnover , explain why the ROI increase over the year 3 level?

$ 1,200,000
ROI = MARGIN =
$ 15,000,000
8.00%
 Reduced during the first years of operations =
Producing reduction in average operating assets=

Sales
TURNOVER = ROI =
Average Operating Asset

YEAR 3
6.30%
10.50%
60.00%

over the year 3 level?

$ 1,200,000 $ 10,000,000
TURNOVER
$ 10,000,000 $ 15,000,000
12.00% 66.67%
 70%
20%

Margin X Turnover
 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