Low Carb Diet Supplement Inc. has two divisions. Division A has a profit of $291,000 on sales of $2,930,000. Division B is able to make only $32,900 on sales of $370,000. a. Compute the profit margins (return on sales) for each division. b. Based on the profit margins (returns on sales), which division is superior?
Low Carb Diet Supplement Inc. has two divisions. Division A has a profit of $291,000 on sales of $2,930,000. Division B is able to make only $32,900 on sales of $370,000. a. Compute the profit margins (return on sales) for each division. b. Based on the profit margins (returns on sales), which division is superior?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management
analysis
Section: Chapter Questions
Problem 16E
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Transcribed Image Text:Low Carb Diet Supplement Inc. has two
divisions. Division A has a profit of $291,000
on sales of $2,930,000. Division B is able to
make only $32,900 on sales of $370,000.
a. Compute the profit margins (return on
sales) for each division.
b. Based on the profit margins (returns on
sales), which division is superior?
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