Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Division QueenslandNew South WalesSales$1,800,000$2,499,000Average operating assets$600,000$510,000Net operating income$180,000$174,930Property, plant, and equipment (net)$260,000$210,000 Required:1. Compute each division's margin, turnover, and return on investment (ROI).2. Which divisional manager seems to be doing the better job?

Compute the division's margin for the Queensland division: Queensland division=$180,000$1,800,000=10% Compute the margin for the New south wales division: New South Wales division=$174,930$2,499,000=7% Compute the turnover for the Queensland division: Queensland division=$1,800,000$600,000=3 Compute the turnover for the New South Wales division: Queensland division=$2,499,000$510,000=4.9 Compute the return on investment:New South Wales division seems to be doing better as its ROI is greater of 34.3%.

Answered: Selected operating data for two…

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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Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below:

	Division
	Queensland	New South Wales
Sales	$	1,800,000	$	2,499,000
Average operating assets	$	600,000	$	510,000
Net operating income	$	180,000	$	174,930
Property, plant, and equipment (net)	$	260,000	$	210,000

Required:

1. Compute each division's margin, turnover, and return on investment (ROI).

2. Which divisional manager seems to be doing the better job?

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