195. Using the data from the Coffee & Cocoa Company,
(a)determine the divisional income from operations for the three regions by allocating the service department expenses proportional to the sales of the regions.
(b)determine the increase or decrease in net income if C Region did not operate.
A RegionB RegionC Region
Sales$600,000$900,000$300,000
Cost of goods sold200,000350,000190,000
Selling expenses150,000275,000100,000
Service department expenses
Purchasing120,000
Payroll accounting80,000
(a)
196. Bentz Co. has two divisions, A and B. Invested assets and condensed income statement data for each division for the past year ended December 31 are as follows:
Division A Division B
Revenues$190,000$125,500
Operating expenses112,50092,750
Service department charges29,50012,625
Invested assets225,00099,000
(a)Prepare condensed income statements for the past year for each division.
(b)Using the expanded expression, determine the profit margin, investment turnover, and rate of return on investment for each division.