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Dacker Products is a division of a major corporation. The following data are for the most recent year of operations:
| Sales | $ | 37,980,000 | |
| Net operating income | $ | 3,558,960 | |
| Average operating assets | $ | 9,500,000 | |
| The company's minimum required |
16 | % | |
The division's margin used to compute ROI is closest to:
-
34.4%
-
37.5%
-
25.0%
-
9.4%
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- Provide the missing data in the following table for a distributor of martial arts products: (Round "Turnover" and "ROI" answers to 1 decimal place.) Alpha Division Bravo Division Charlie Division Sales $ 276,000 Net operating income $ 38,640 $ 39,780 Average operating assets $ 459,000 Margin 7% % 13 % Turnover 4.0 Return on investment (ROI) % 28.0 % 19.5 %The South Division of Wiig Company reported the following data for the current year. Sales Variable costs Controllable fixed costs Average operating assets 1. 2. 3. Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. Return on Investment $2,950,000 1,947,000 Increase sales by $300,000 with no change in the contribution margin percentage. Reduce variable costs by $155,000. Reduce average operating assets by 4%. Action 1 595,000 (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%.) Action 2 5,000,000 Action 3 (b) Using the ROI formula, compute the ROI under each of the proposed courses of action. (Round ROI to 2 decimal places, e.g. 1.57%.) Return on investment do % % % %Profit Margin, Investment Turnover, and return on investment The condensed income statement for the Consumer Products Division of Fargo Industries Inc. is as follows (assuming no service department charges): Sales $816,000 Cost of goods sold 367,200 Gross profit $448,800 Administrative expenses 285,600 Income from operations $163,200 The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $1,360,000 of assets have been invested in the Consumer Products Division. Round the investment turnover to one decimal place. Profit margin 2 x % Investment turnover Rate of return on investment % b. If expenses could be reduced by $40,800 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer…
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