Profit Margin, Investment Turnover, and Return on Investment The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department allocations): Sales $756,000 Cost of goods sold (340,200) Gross profit $415,800 Administrative expenses (151,200) Operating income $264,600 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 $1,890,000 of assets have been invested in the Consumer Products Division. Round the investment turnover to one decimal place. Profit margin Investment turnover Return on investment b. If expenses could be reduced by $37,800 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? Round the investment turnover to one decimal place. Profit margin % Investment turnover Return on investment %

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Profit Margin, Investment Turnover, and Return on Investment
The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department allocations):
Sales
$756,000
Cost of goods sold
(340,200)
Gross profit
$415,800
Administrative expenses
(151,200)
Operating income
$264,600
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 $1,890,000 of assets have been invested in the Consumer
Products Division. Round the investment turnover to one decimal place.
Profit margin
%
Investment turnover
Return on investment
%
b. If expenses could be reduced by $37,800 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? Round the investment turnover to one
decimal place.
Profit margin
%
Investment turnover
Return on investment
%
Transcribed Image Text:Profit Margin, Investment Turnover, and Return on Investment The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department allocations): Sales $756,000 Cost of goods sold (340,200) Gross profit $415,800 Administrative expenses (151,200) Operating income $264,600 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 $1,890,000 of assets have been invested in the Consumer Products Division. Round the investment turnover to one decimal place. Profit margin % Investment turnover Return on investment % b. If expenses could be reduced by $37,800 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? Round the investment turnover to one decimal place. Profit margin % Investment turnover Return on investment %
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