How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Linda_us Your Own Question

Linda_us
Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7291
Experience:  Post Graduate Diploma in Management (MBA)
19873544
Type Your Homework Question Here...
Linda_us is online now
A new question is answered every 9 seconds

ASSIGNMENT 04 BU330 Accounting for Managers Directions:

Customer Question

ASSIGNMENT 04
BU330 Accounting for Managers
Directions: Be sure to make an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English spelling and grammar. Sources must be cited in APA format. Your response should be a minimum of one (1) single-spaced page to a maximum of two (2) pages in length; refer to the "Assignment Format" page for specific format requirements.

Return on Investment and Residual Income

Portia Carter is the president of a company that owns six multiplex movie theaters. Carter has delegated decision-making authority to the theater managers for all decisions except those relating to capital expenditures and film selection. The theater managers’ compensation depends on the profitability of their theaters. Max Burgman, the manager of the Park Theater, had the following master budget and actual results for the month.
Master Actual
Budget Results
Tickets sold 120,000 480,000
Revenue--tickets $ 840,000 $ 880,000
Revenue--concessions 480,000 330,000
Total revenue $1,320,000 $1,210,000
Controllable variable costs
Concessions 120,000 99,000
Direct labor 420,000 330,000
Variable overhead 540,000 550,000
Contribution margin $ 240,000 $ 231,000
Controllable fixed costs
Rent 55,000 55,000
Other administrative expenses 45,000 50,000
Theater operating income $ 140,000 $ 126,000


1. Assuming that the theaters are profit centers, prepare a performance report for the Park Theater using the chart below. Include a flexible budget. Determine the variances between actual results, the flexible budget, and the master budget. (25 points)

Actual Flexible Master
Results Variance Budget Variance Budget
Tickets sold 110,000 ( ) 120,000
Revenue--tickets $ 880,000 ( ) ( ) $ 840,000
Revenue--concessions 330,000 ( ) ( ) 480,000
Total revenue $1,210,000 ( ) $1,320,000
Controllable variable costs
Concessions 99,000 ( ) ( ) 120,000
Direct labor 330,000 ( ) ( ) 420,000
Variable overhead 550,000 ( ) ( ) 540,000
Contribution margin $ 231,000 ( ) ( ) $ 240,000
Controllable fixed costs
Rent 55,000 55,000
Other administrative expenses 50,000 ( ) 45,000
Theater operating income $ 126,000 ( ) ( ) $ 140,000

2. Evaluate Burgman’s performance as a manager. (25 points)





3. Assume that the managers are assigned responsibility for capital expenditures and that the theaters are thus investment centers. Park Theater is expected to generate a desired ROI of at least 6 percent on average invested assets of $2,000,000.

a. Compute the theater’s return on investment and residual income using the chart below. (25 points)

Actual Flexible Master
ROI ÷ ÷ ÷
= 0.00% = 0.00% = 0.00%
Residual income – ( 0% x ) – ( 0% x ) – ( 0% x )
= = =


b. Using the ROI and residual income, evaluate Burgman’s performance as a manager. (25 points)
Submitted: 3 years ago.
Category: Homework
Expert:  Linda_us replied 3 years ago.
THIS ANSWER IS LOCKED!

You need to spend $3 to view this post. Add Funds to your account and buy credits.
Customer: replied 3 years ago.


i clicked the link and the answer didn't come up


 

Expert:  Linda_us replied 3 years ago.
THIS ANSWER IS LOCKED!

You need to spend $3 to view this post. Add Funds to your account and buy credits.
Customer: replied 3 years ago.


I'm sorry linda but it won't come up for me, is there another way to get this answer

Expert:  Linda_us replied 3 years ago.
THIS ANSWER IS LOCKED!

You need to spend $3 to view this post. Add Funds to your account and buy credits.
Customer: replied 3 years ago.


Thank you Linda,


That worked perfectly

Expert:  Linda_us replied 3 years ago.
Great. Let know if you need any further help.

You can request me in future by writing "FOR LINDA" at start of your post.
Customer: replied 3 years ago.


Yes ma'am, i sure will

Expert:  Linda_us replied 3 years ago.
Thanks.

Expert:  Linda_us replied 3 years ago.
Hi Chris

I'm just following up with you to see how everything is going. Did my answer help? If yes, please rate the solution by clicking smiley face.

If you have any further question please let me know I would be happy to help.

Let me know,
Linda
Expert:  Linda_us replied 3 years ago.
Hi Chris

I'm just following up with you to see how everything is going. Did my answer help? If yes, please rate the solution by clicking smiley face.

If you have any further question please let me know I would be happy to help.

Let me know,
Linda

Related Homework Questions