Creative Business Solutions (CBS), a division of Doug Jorgenson CPA, buys and installs modular office components. For the most recent year, the division had the following performance targets: Asset turnover 2.5 6% Profit margin Target rate of return on investments for RI 13% Cost of capital Income tax rate 10% 40% Actual information concerning the company's performance for last year follows: Total assets at beginning of year Total assets at end of year Total invested capital (annual average). Sales $3,600,000 5,300,000 8,000,000 9,000,000 3,650,000 4,770,000 675,000 Variable operating costs Direct fixed costs Allocated fixed costs
Creative Business Solutions (CBS), a division of Doug Jorgenson CPA, buys and installs modular office components. For the most recent year, the division had the following performance targets: Asset turnover 2.5 6% Profit margin Target rate of return on investments for RI 13% Cost of capital Income tax rate 10% 40% Actual information concerning the company's performance for last year follows: Total assets at beginning of year Total assets at end of year Total invested capital (annual average). Sales $3,600,000 5,300,000 8,000,000 9,000,000 3,650,000 4,770,000 675,000 Variable operating costs Direct fixed costs Allocated fixed costs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
3. Based on segment margin and average assets, compute the profit margin
4. Based on segment margin and average assets, compute the asset turnover
5. Based on segment margin and average assets, compute the ROI.
![Creative Business Solutions (CBS), a division of Doug Jorgenson CPA, buys and
installs modular office components. For the most recent year, the division had the
following performance targets:
Asset turnover
2.5
Profit margin
Target rate of return on investments for RI 13%
Cost of capital
Income tax rate
6%
10%
40%
Actual information concerning the company's performance for last year follows:
Total assets at beginning of year
Total assets at end of year
Total invested capital (annual average).
Sales
$3,600,000
5,300,000
8,000,000
9,000,000
3,650,000
4,770,000
675,000
Variable operating costs
Direct fixed costs
Allocated fixed costs](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F03db1fb7-5b65-4a36-aabd-81169e6247e0%2F9628090f-97e6-4f1a-b9b5-04c8922debc7%2Ff9mnc7s_processed.png&w=3840&q=75)
Transcribed Image Text:Creative Business Solutions (CBS), a division of Doug Jorgenson CPA, buys and
installs modular office components. For the most recent year, the division had the
following performance targets:
Asset turnover
2.5
Profit margin
Target rate of return on investments for RI 13%
Cost of capital
Income tax rate
6%
10%
40%
Actual information concerning the company's performance for last year follows:
Total assets at beginning of year
Total assets at end of year
Total invested capital (annual average).
Sales
$3,600,000
5,300,000
8,000,000
9,000,000
3,650,000
4,770,000
675,000
Variable operating costs
Direct fixed costs
Allocated fixed costs
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