Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] A manufacturer reports the following for two of its divisions for a recent month. Average assets Sales Income Beverage Division $ 8,200 3,480 888 Cheese Division $ 14,800 5,640 1,280 Exercise 22-12 (Algo) Computing ROI, profit margin, and investment turnover LO A1, A2 For each division, compute: 1. return on investment. 2. profit margin.

Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below.] A manufacturer reports the following for two of its divisions for a recent month. Average assets Sales Income Beverage Division $ 8,200 3,480 888 Cheese Division $ 14,800 5,640 1,280 Exercise 22-12 (Algo) Computing ROI, profit margin, and investment turnover LO A1, A2 For each division, compute: 1. return on investment. 2. profit margin.

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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The following information is available about the status and operations of the Manufacturing Division of Taylor Company, which has a hurdle rate of 6%. Divisional identifiable average assets $ 411,637 Divisional income from operations $ 18,924 Divisional sales revenue $ 368,363 1. Compute the ROI for the Manufacturing Division. 2. Break the Manufacturing Division ROI down using the Profit Margin and Investment turnover (DuPont) formula. 3. Compute the residual income for the Manufacturing Division.
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ROI is effective because it takes into consideration the three factors under the control of an investment center manager: revenues, costs, and investments. ROI measures the income (or return) earned on each dollar of investment. APPLY THE CONCEPTS: Calculating return on investment The divisional income statements for three divisions of the McLaren Company are shown. McLaren Company Divisional Income Statements For the Year Ending December 31, 2012 Division A Division B Division C Sales Revenue $1,947,000 $1,197,000 $594,000 Operating expenses (1,148,730) (897,750) (314,820) Operating income before service department charges $798,270 $299,250 $279,180 Service department charges (467,280) (177,156) (166,320) Operating income $330,990 $122,094 $112,860 Additional financial data from the three divisions of the McLaren Company are shown. Division A Division B Division C Invested assets $1,100,000 $665,000 $450,000 Calculate the return on investment for each division. If required, round the…
Provide the missing data in the following table for a distributor of martial arts products: (Round "Turnover" and "ROI" answers to 1 decimal place.) Alpha Division Bravo Division Charlie Division Sales $ 276,000 Net operating income $ 38,640 $ 39,780 Average operating assets $ 459,000 Margin 7% % 13 % Turnover 4.0 Return on investment (ROI) % 28.0 % 19.5 %
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Required information Skip to question [The following information applies to the questions displayed below.] King Mattresses sells both mattress sets and bed frames. Last quarter, total sales were $70,000 for mattress sets and $45,000 for bed frames. Return on investment (ROI) was 15% for both divisions, while asset turnover (AT) was 3 for mattress sets and 3 for bed frames. Compute King Mattresses’s total return on sales (ROS) for the quarter.
Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Required 1X Required 2 Sales Net operating income. Average operating assets Required: 1. For each division, compute the return on investment (ROI). 2. Compute the residual income for each division assuming the company's minimum required rate of return is 15%. Complete this question by entering your answers in the tabs below. ROI Osaka $ 10,500,000 $630,000 $ 3,500,000 Osaka Division For each division, compute the return on investment (ROI). % Yokohama $ 35,000,000 $ 2,800,000 $ 17,500,000 Yokohama %
nts Exercise 10-2 (Algo) Residual Income [LO10-2] Juniper Design Limited of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $420,000 on sales of $1,200,000. The company's average operating assets for the year were $1,400,000 and its minimum required rate of return was 12%.
Provide the missing data in the following table for a distributor of martial arts products: (Enter "Turnover" and "ROI" answers to 1 decimal place.) Division Alpha Bravo Charlie Sales $327,500 Net operating income $32,750 $41,400 Average operating assets $376,000 Margin 5 % % 9 % Turnover 5.0 Return on investment (ROI) % 25.0 % 18.0 %
Long Beach Pharmaceutical Company has two divisions, which reported the following results for the most recent year. Income Average invested capital ROI Division I $ 900,000 $6,000,000 Division II $ 200,000 $1,000,000 15% 20% Which was the more successful division during the year? Think carefully about this, and Required: explain your answer.
Low Carb Diet Supplement Inc. has two divisions. Division A has a profit of $133,000 on sales of $2,010,000. Division B is able to make only $25,600 on sales of $300,000. a. Compute the profit margins (return on sales) for each division. (Input your answers as a percent rounded to 2 decimal places.) Division A Division B Profit Margin b. Based on the profit margins (returns on sales), which division is superior? O Division A Division B
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