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Sales revenue Income Division A ? Division B Division C $ 11,000,000 ? $570,000 $ 2,150,000 ? Average investment ? $ 2,670,000 ? Sales margin 40% ? 45% Capital turnover ROI Residual income 232 2 ? ? ? ? 30% ? ? $ 140,000

Sales revenue Income Division A ? Division B Division C $ 11,000,000 ? $570,000 $ 2,150,000 ? Average investment ? $ 2,670,000 ? Sales margin 40% ? 45% Capital turnover ROI Residual income 232 2 ? ? ? ? 30% ? ? $ 140,000

FINANCIAL ACCOUNTING
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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Required information Use the following information for the Problems below: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on invested capital is 8 percent. Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Division A ? Division B Division C $ 11,000,000 ? $ 570,000 $ 2,150,000 ? ? $ 2,670,000 ? 40% ? 45% 2 ? ? 222 ? ? ? 30% ? $ 140,000 Required: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on invested capital is 10 percent. Note: Round "Capital turnover" answers to 2 decimal places. > Answer is complete but not entirely correct. Division A Division B Division C Sales revenue $ 1,425,000 × $ 40,400,000 $ 466,690 x Income $ 1,650,000 $ 8,080,000 $ 210,000 x Average investment $ 712,000 $ 10,100,000 $ 700,000 Sales margin 22 % 20 % 25 % Capital turnover 1.00 4.12 x 66.67 x ROI 80% 81 % 22 % Residual income $ 513,000 x $ 1,936,000 × $ 486,000
Transcribed Image Text:Required information Use the following information for the Problems below: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on invested capital is 8 percent. Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Division A ? Division B Division C $ 11,000,000 ? $ 570,000 $ 2,150,000 ? ? $ 2,670,000 ? 40% ? 45% 2 ? ? 222 ? ? ? 30% ? $ 140,000 Required: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return on invested capital is 10 percent. Note: Round "Capital turnover" answers to 2 decimal places. > Answer is complete but not entirely correct. Division A Division B Division C Sales revenue $ 1,425,000 × $ 40,400,000 $ 466,690 x Income $ 1,650,000 $ 8,080,000 $ 210,000 x Average investment $ 712,000 $ 10,100,000 $ 700,000 Sales margin 22 % 20 % 25 % Capital turnover 1.00 4.12 x 66.67 x ROI 80% 81 % 22 % Residual income $ 513,000 x $ 1,936,000 × $ 486,000
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