ACCT 505 Course Great Wisdom / tutorialrank.com ACCT 505 Course Great Wisdom / tutorialrank.com | Page 24

Sales revenues, Fibers
$870,000
Sales revenues, Feedstocks
$820,000
Variable expenses, Fibers
$426,000
Variable expenses, Feedstocks
$344,000
Traceable fixed expenses, Fibers
$148,000
Traceable fixed expenses, Feedstocks
S156,000
Common fixed expenses totaled $314,000 and were allocated as follows: $129,000 to the
Fibers business segment and $185,000 to the Feedstocks business segment.
Required:
Prepare a segmented income statement in the contribution format for the company. Omit
percentages; show only dollar amounts.
2. Question :
(TCO D) Wryski Corporation had net operating income of $150,000 and average operating
assets of $500,000. The company requires a return on investment of 19%.
Required:
i. Calculate the company's current return on investment and residual income.
ii. The company is investigating an investment of $400,000 in a project that will generate
annual net operating income of $78,000. What is the ROI of the project? What is the residual
income of the project? Should the company invest in this project?