Planes Taxis Limos $498,700 5,506,000 296,800 246,000 471,445 1,504,700 79,000 2

Question

Planes

Taxis

Limos

$498,700

5,506,000

296,800

246,000

471,445

1,504,700

79,000

228,645

24,987,600

1,524,300

11

8

Planes

Taxis

Limos

Service revenue $

$498,700

$

Variable costs

5,506,000

296,800

Contribution margin

246,000

471,445

Controllable fixed costs

1,504,700

Controllable margin

79,000

228,645

Average operating assets

24,987,600

1,524,300

Return on investment

11

%

8

%

% *Question1 The Ferrell Transportation Company uses a responsibility reporting system to measure the performance of its three investment centers: Planes, Taxis, and Limos. Segment performance is measured using a system of responsibility reports and return on investment calculations. The allocation of resources within the company and the segment managers' bonuses are based in part on the results shown in these reports. Recently, the company was the victim of a computer virus that deleted portions of the company's accounting records. This was discovered when the current period's responsibility reports were being prepared. The printout of the actual operating results appeared as follows Determine the missing pieces of information below. (Round intermediate calculations and final answers to 0 decimal places, e.g. 1,255.) Planes Taxis Limos Service revenue Variable costs Contribution margin Controllable fixed costs Controllable margin Average operating assets Return on investment $498,700 296,800 471,445 5,506,000 246,000 1,504,700 79,000 228,645 24,987,600 1,524,300 11% 896 Question Attempts: 0 of 3 used 2000-2018 by John Wiey & Sons, Inc. or related companies. All nghts reserved.

Explanation / Answer

Particulars Planes Taxis Limos Service revenue Planes = 5506,000 + 4253,336 Limos = 296,800 + 471,445                9,759,336.00                    498,700.00                       768,245.00 Variable costs Taxis = 498,700 - 246,000                5,506,000.00                    252,700.00                       296,800.00 Contribution margin Planes = 1504,700 + 2748,636                4,253,336.00                    246,000.00                       471,445.00 Controllable fixed costs Taxis = 246,000-79,000 Limos = 471,445 - 228,645                1,504,700.00                    167,000.00                       242,800.00 Controllable margin Planes = 24,987,600*11%                2,748,636.00                      79,000.00                       228,645.00 Average operating assets Taxis = 79000/8%              24,987,600.00                    987,500.00                    1,524,300.00 Return on investment Limos = 228,645/1524,300 11% 8% 15.00%

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