The Ferrell Transportation Company uses a responsibility reporting system to mea

Question

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 $503,300 5,501,900 299,300 245,300 490,656 1,495,300 84,000 251,056 24,957,600 1,476,800 11% 12 %

Explanation / Answer

Sales-Variable costs=Contribution margin

Contribution margin-Controllable fixed costs=Controllable margin

ROI=Controllable margin/Average operating assets

Planes Taxis Limos Service 9742536 503300 789956 Variable costs 5501900 258000 299300 Contribution margin 4240636 245300 490656 Controllable fixed costs 1495300 161300 239600 Controllable margin 2745336 84000 251056 Average operating assets 24,957,600 700,000 1476800 ROI 11% 12% 17%

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