Question Content Area Divisional income statements and return on investment analysis The Crunchy Granola Company is a diversified food company that specializes in all natural foods. The company has three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y7, are as follows: Line Item Description Cereal Division Snack Cake Division Retail Bakeries Division Sales $25,000,000 $8,000,000 $9,750,000 Cost of goods sold 16,670,000 5,575,000 6,795,000 Operating expenses 7,330,000 1,945,000 2,272,500 Invested assets 10,000,000 4,000,000 6,500,000 The management of The Crunchy Granola Company is evaluating each division as a basis for planning a future expansion of operations. Required: Question Content Area 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. The Crunchy Granola CompanyDivisional Income StatementsFor the Year Ended June 30, 20Y7 Line Item Description Cereal Division Snack Cake Division Retail Bakeries Division Sales $Sales $Sales $Sales Cost of goods sold Cost of goods sold Cost of goods sold Cost of goods sold Gross profit $Gross profit $Gross profit $Gross profit Operating expenses Operating expenses Operating expenses Operating expenses Operating income $Operating income $Operating income $Operating income Feedback Area Feedback 1. For each division, subtract operating expenses from sales. Question Content Area 2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. If required, round your answers to one decimal place. Division Profit Margin Investment Turnover ROI Cereal Division fill in the blank 1 of 9 % fill in the blank 2 of 9 fill in the blank 3 of 9 % Snack Cake Division fill in the blank 4 of 9 % fill in the blank 5 of 9 fill in the blank 6 of 9 % Retail Bakeries Division fill in the blank 7 of 9 % fill in the blank 8 of 9 fill in the blank 9 of 9 %
Question Content Area
Divisional income statements and
The Crunchy Granola Company is a diversified food company that specializes in all natural foods. The company has three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y7, are as follows:
Line Item Description | Cereal Division |
Snack Cake Division |
Retail Bakeries Division |
---|---|---|---|
Sales | $25,000,000 | $8,000,000 | $9,750,000 |
Cost of goods sold | 16,670,000 | 5,575,000 | 6,795,000 |
Operating expenses | 7,330,000 | 1,945,000 | 2,272,500 |
Invested assets | 10,000,000 | 4,000,000 | 6,500,000 |
The management of The Crunchy Granola Company is evaluating each division as a basis for planning a future expansion of operations.
Required:
Question Content Area
1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations.
Line Item Description |
Cereal Division |
Snack Cake Division |
Retail Bakeries Division |
---|---|---|---|
Sales | $Sales | $Sales | $Sales |
Cost of goods sold | Cost of goods sold | Cost of goods sold | Cost of goods sold |
Gross profit | $Gross profit | $Gross profit | $Gross profit |
Operating expenses | Operating expenses | Operating expenses | Operating expenses |
Operating income | $Operating income | $Operating income | $Operating income |
Feedback Area
1. For each division, subtract operating expenses from sales.
Question Content Area
2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. If required, round your answers to one decimal place.
Division | Profit Margin | Investment Turnover | ROI |
---|---|---|---|
Cereal Division | fill in the blank 1 of 9 % | fill in the blank 2 of 9 | fill in the blank 3 of 9 % |
Snack Cake Division | fill in the blank 4 of 9 % | fill in the blank 5 of 9 | fill in the blank 6 of 9 % |
Retail Bakeries Division | fill in the blank 7 of 9 % | fill in the blank 8 of 9 | fill in the blank 9 of 9 % |
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