Prepare a revised performance report, Managerial Accounting

Assignment Help:

Yuma foods acquire Aldo's tortillas several years ago. Aldo's continued to operate as an independent company, except that Yuma foods has exclusive authority over capital investments, production quantity, and pricing decisions because Yuma has been Aldo's only customer since the acquisition. Yuma uses return on investment to evaluate the performance of Aldo's manager. The most recent performance report follows.

Yuma foods
Performance report for Aldo's tortillas
For the year ended June 30

Sales $6000
Variable cost of goods sold (3000)
Variable administrative expenses (1000)
Variable corporate expenses %of sales (600)

Contribution margin $1,400
Fixed overhead includes depreciation of $100 (400)
Fixed administrative expenses (500)
Operating income $500
Average assets invested $5,500
Return on investment 9.09%*


1. Analyze the items listed in the performance report, and identify the items that Aldo controls and those that Yuma controls. In your opinion, what types of responsibility center is Aldo's Tortillas? Explain your response. (Round to two decimal places.)


2. Prepare a revised performance report for Aldo's Tortillas and an accompanying memo to the president of Yuma Foods that explains why it is important to change the content of the report. Cite some basic principles of responsibility accounting to support your recommendation.

 


Related Discussions:- Prepare a revised performance report

Public deposits, Deposits from the public are one of the important sources ...

Deposits from the public are one of the important sources of finance mainly for fine established big companies along with a vast capital base. The period of public deposits is rest

Process of pricing in maturity period, Q.Process of Pricing in maturity per...

Q.Process of Pricing in maturity period? Maturing periods is the third stage in the life cycle of a product. If is a stage between growth period and decline period of sales. So

Capital budgeting – planning investments, Project C would involve a current...

Project C would involve a current outlay of $50,000 on equipment and $15,000 on working capital. The investment in working capital would be increased to $21,000 at the end of the f

Credit limit, Credit Limit A credit restriction is the maximum amount o...

Credit Limit A credit restriction is the maximum amount of credit that the firm will extend at a point of time. This indicates the extent of risk taken through the firm through

Factors influencing working capital requirements, The working capital needs...

The working capital needs of a firm are influenced by many factors. The important ones are as follows: Nature of business: The working capital necessity of a firm is closely l

Explain administration cost and pre production costs, Explain Administratio...

Explain Administration cost and Pre production costs Administration cost: The cost of formulating policy, directing the organization and controlling the operating of an u

Transfer pricing methods, Transfer Pricing Methods Transfer pricing met...

Transfer Pricing Methods Transfer pricing methods are concerned with the alternative means by which a transfer price can be set and its impact on organizations gauged. Emmanuel

What is ratio analysis, Ratio analysis A ratio is a simple arithmetical...

Ratio analysis A ratio is a simple arithmetical expression of the relationship of one number to another. It may be explained as the indicated quotient of two mathematical ex

Marginal costing technique, how company apply marginal costing techniques s...

how company apply marginal costing techniques show with an example

Consulting project, CONSULTING PROJECT Pricing and Production Decision...

CONSULTING PROJECT Pricing and Production Decisions at PoolOut Ltd  PoolOut Ltd manufactures and sells a single product called the "RainIn", which is a patent-protected au

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd