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المحاسب الإداري المعتمد الجزء 1 C. Performance Management

HelioGrid: Depot Performance and a Conditional Sale

HelioGrid Battery Services

Questions: 7 Answered:

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Question of 7 HelioGrid: Depot Performance and a Conditional Sale
HelioGrid: Depot Performance and a Conditional Sale Case-based question
The case

HelioGrid refurbishes industrial battery modules at regional depots. Depot supervisors control processing and operating costs but cannot set selling prices, negotiate customer contracts, or authorize capital investments. The commercial office controls prices and customer acquisition; it is evaluated on revenue and has no authority over depot costs or investments.

The following annual results relate to the Solace depot.

Measure Original budget Actual
Modules sold 80,000 90,000
Selling price per module $90 $88
Variable refurbishment cost $3,600,000 $4,140,000
Fixed refurbishment cost $1,000,000 $1,080,000
Variable selling and distribution cost $400,000 $450,000
Fixed selling and administration cost $500,000 $480,000

Average operating assets assigned to Solace were $9,000,000. HelioGrid requires a 12% annual pretax return on those assets. The board also tracks customer renewal, promised delivery dates, technician certifications, production yield, and operating margin.

On December 20, HelioGrid received a $750,000 refundable deposit from an investor interested in buying the Solace site. The sale remains subject to financing and due diligence, control of the site has not transferred, and the deposit must be returned if the transaction fails.

Assumptions

  • Use U.S. GAAP for the deposit question; there is no present right to recognize sale proceeds as income.
  • All modules produced during the year were sold, and variable cost standards remain constant within the relevant range.
  • Flex the budget using actual units and original budgeted selling prices and variable cost rates; retain original fixed cost budgets.
  • Residual income means actual pretax operating income less 12% of average operating assets; ignore income taxes.
For evaluating the authority actually delegated by HelioGrid, classify a depot supervisor's unit as a Depot responsibility center and the commercial office as a Commercial office responsibility center .
Assign each HelioGrid measure to its primary balanced scorecard perspective: customer contract renewal rate Contract renewal ; technicians certified in the new diagnostic method Technician certification ; share of modules passing final testing without rework First-pass test yield ; operating income as a percentage of sales Operating margin ; percentage of customer deliveries meeting the promised date, used as a service promise measure Delivery promise reliability .

Calculate the absolute dollar difference between Solace's actual operating income and its flexible budget operating income for the year. Enter a positive whole-dollar amount, rounded to the nearest dollar.

USD

A whole number.

Relative to the operating income HelioGrid budgeted for the actual number of modules sold, Solace's overall operating income variance is Operating income variance direction .

Which TWO effects should HelioGrid record upon receiving the refundable site deposit on December 20?

Select two answers. Selected 0 / 2

Answer
Choose the primary statement for each investor question: what obligations remain outstanding at December 31 Year-end obligations ; what profit was earned during the year Annual profit ; how much cash was spent buying equipment Equipment cash purchases ; what cash came from new borrowing Cash from borrowing ; what operating assets remain at the reporting date Assets at reporting date ; how operating cash flows reconcile to accrual income under the indirect method Operating cash reconciliation .

Determine Solace's actual annual residual income using HelioGrid's 12% required return. Enter a whole-dollar amount rounded to the nearest dollar; use a minus sign only if residual income is negative.

USD

A whole number. A negative amount may be written with a minus sign or in brackets.

The marks, the correct answers and the explanations appear as soon as the answers are submitted. Unanswered questions earn no marks.

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