Investment Center A B Sales $10,400,000 Net income $ 352,000 $ $1,400,000 2$ Average invested assets Profit margin 8% Investment turnover 1.5 Return on investment ?% 12% Use the information in the table above to compute each department's contribution to overhead (both in dollars and as a percer (Round your final answers to 2 decimal places.) Profit Margin: Choose Numerator: Choose Denominator: Profit Margin Investment Center Profit margin A 8.00 % В % Investment Turnover: Choose Numerator: Choose Denominator: Investment Turnover Investment Center Investment turnover A В 1.50 Return on investment: Choose Numerator: Choose Denominator: Return on investment Investment Center Return on investment %3D A В 12.00 %

Investment Center A B Sales $10,400,000 Net income $ 352,000 $ $1,400,000 2$ Average invested assets Profit margin 8% Investment turnover 1.5 Return on investment ?% 12% Use the information in the table above to compute each department's contribution to overhead (both in dollars and as a percer (Round your final answers to 2 decimal places.) Profit Margin: Choose Numerator: Choose Denominator: Profit Margin Investment Center Profit margin A 8.00 % В % Investment Turnover: Choose Numerator: Choose Denominator: Investment Turnover Investment Center Investment turnover A В 1.50 Return on investment: Choose Numerator: Choose Denominator: Return on investment Investment Center Return on investment %3D A В 12.00 %

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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QS 22-11 Performance measures LO A1, A2

Investment Center	A	B
Sales	$	?		$	10,400,000
Net income	$	352,000		$	?
Average invested assets	$	1,400,000		$	?
Profit margin		8	%		?	%
Investment turnover		?			1.5
Return on investment		?	%		12	%

Use the information in the table above to compute each department’s contribution to overhead (both in dollars and as a percent). (Round your final answers to 2 decimal places.)

The image displays a table and work area for calculating financial metrics for two investment centers, A and B.

### Table Overview:

- **Investment Center A and B**
- **Sales:**
- A: Unknown ($?)
- B: $10,400,000
- **Net Income:**
- A: $352,000
- B: Unknown ($?)
- **Average Invested Assets:**
- A: $1,400,000
- B: Unknown ($?)
- **Profit Margin:**
- A: 8%
- B: Unknown (?)
- **Investment Turnover:**
- A: Unknown (?)
- B: 1.5
- **Return on Investment (ROI):**
- A: Unknown (?)
- B: 12%

### Instructions:
"Use the information in the table above to compute each department’s contribution to overhead (both in dollars and as a percent). **Round your final answers to 2 decimal places.**"

### Calculation Areas:

1. **Profit Margin:**
- Formula: (Net Income / Sales) * 100
- **Center A:**
- Given: Profit margin is 8%
- **Center B:**
- Data fields left open for computation

2. **Investment Turnover:**
- Formula: Sales / Average Invested Assets
- **Center A:**
- Data fields left open for computation
- **Center B:**
- Given: Turnover is 1.5

3. **Return on Investment (ROI):**
- Formula: (Net Income / Average Invested Assets) * 100
- **Center A:**
- Data fields left open for computation
- **Center B:**
- Given: ROI is 12%

### Additional Notes:
- Yellow fields are editable cells for input.
- Each section has placeholders to select the numerator and denominator for calculations.

This interactive table guides users in calculating key financial ratios, allowing for manual input and encouraging the understanding of the relationships between sales, net income, and invested assets.

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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