Managerial Accounting + Connect Access Card
7th Edition
ISBN: 9781260581263
Author: John Wild
Publisher: McGraw-Hill College
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Textbook Question
Chapter 9, Problem 12QS
Computing profit margin and investment turnover A2
A company’s shipping division (an investment center) has sales of $2,420,000.net income of $516,000.and average invested assets of &2,250,000. Compute the division profit margin and investment turnover.
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A company's two divisions report the information below.
Sales
Income
Average assets
Electronics
$ 81,000
5,670
40,500
Sporting Goods
$ 40,000
4,100
25,000
Enter answers in the tabs below.
Required 1
Required 2
Required 3
Calculate return on investment for each division.
Division
Electronics
Sporting Goods
Return on Investment
Numerator
Denominator:
=
Return on Investment
A company’s shipping division (an investment center) has sales of $2,420,000, net income of $516,000, and average invested assets of $2,250,000. Compute the division’s profit margin and investment turnover.
Investment Center
Sales.
Net income
Average invested assets
Profit margin
Investment turnover
Return on investment
Profit Margin:
Investment
Center
A
B
Investment Turnover:
Investment
Center
A
B
Choose Numerator:
Investment
Center
Use the information in the table above to compute each department's contribution to overhead (both in dollars and as a percent).
(Round your final answers to 2 decimal places.)
Return on investment:
A
B
Choose Numerator:
Choose Numerator:
1
A
1
$
$ 584,600
$1,580,000
?
1
10%
?
?%
B
$12,200,000
$
$
1 Choose Denominator:
Choose Denominator:
1 Choose Denominator:
?
?
?%
1.3
13%
=
Profit Margin
Profit margin
10.00 %
%
= Investment Turnover
= Investment turnover
1.30
Return on
investment
= Return on investment
%
13.00 %
Chapter 9 Solutions
Managerial Accounting + Connect Access Card
Ch. 9 - Prob. 1MCQCh. 9 - Prob. 2MCQCh. 9 - Prob. 3MCQCh. 9 - Prob. 4MCQCh. 9 - 5. Using the data in question 4, Department X’s...Ch. 9 - Prob. 1DQCh. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Prob. 4DQCh. 9 - Prob. 5DQ
Ch. 9 - Prob. 6DQCh. 9 - Prob. 7DQCh. 9 - Prob. 8DQCh. 9 - Prob. 9DQCh. 9 - Prob. 10DQCh. 9 - Prob. 11DQCh. 9 - Prob. 12DQCh. 9 - Prob. 13DQCh. 9 - Prob. 14DQCh. 9 - Prob. 15DQCh. 9 - Prob. 16DQCh. 9 - Prob. 17DQCh. 9 - Prob. 18DQCh. 9 - Allocation and measurement terms C1 In each blank...Ch. 9 - Basis for cost allocation C1 In each blank next...Ch. 9 - Prob. 3QSCh. 9 - Prob. 4QSCh. 9 - Prob. 5QSCh. 9 - Prob. 6QSCh. 9 - Prob. 7QSCh. 9 - Prob. 8QSCh. 9 - Computing return on investment A1 Compute return...Ch. 9 - Computing residual income A1 Refer to the...Ch. 9 - Prob. 11QSCh. 9 - Computing profit margin and investment turnover A2...Ch. 9 - Performance measures__balanced scorecard A3...Ch. 9 - Prob. 14QSCh. 9 - Prob. 15QSCh. 9 - Prob. 16QSCh. 9 - Prob. 17QSCh. 9 - Prob. 18QSCh. 9 - Prob. 19QSCh. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 - Prob. 3ECh. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - Prob. 6ECh. 9 - Prob. 7ECh. 9 - Prob. 8ECh. 9 - Prob. 9ECh. 9 - Prob. 10ECh. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Exercise 22-16 Performance measures-balanced...Ch. 9 - Prob. 17ECh. 9 - Prob. 18ECh. 9 - Prob. 19ECh. 9 - Prob. 20ECh. 9 - Prob. 21ECh. 9 - Prob. 22ECh. 9 - Prob. 23ECh. 9 - Prob. 1PSACh. 9 - Prob. 2PSACh. 9 - Prob. 3PSACh. 9 - Prob. 4PSACh. 9 - Prob. 5PSACh. 9 - Prob. 1PSBCh. 9 - Prob. 2PSBCh. 9 - Prob. 3PSBCh. 9 - Prob. 4PSBCh. 9 - Prob. 5PSBCh. 9 - Santana Rey’s two departments, computer consulting...Ch. 9 - Prob. 1AACh. 9 - Prob. 2AACh. 9 - Prob. 3AACh. 9 - Prob. 1BTNCh. 9 - Prob. 2BTNCh. 9 - Prob. 3BTNCh. 9 - Prob. 4BTNCh. 9 - Prob. 5BTNCh. 9 - Prob. 6BTN
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- A7arrow_forwardSolve general accounting questionarrow_forwardData for Divisions A, B, C, D, and E are as follows: a. Determine the missing items. Round return on investment, profit margin, and investment turnover answers to one decimal place when required. Div. Sales Income from Operations Inv. Assets Return on Invest. Profit Margin Invest. Turnover A $fill in the blank 1 $35,000 $200,000 fill in the blank 2 % fill in the blank 3 % 1.6 B $455,000 $fill in the blank 4 $284,375 16% fill in the blank 5 % fill in the blank 6 C $525,000 $73,500 $fill in the blank 7 fill in the blank 8 % fill in the blank 9 % 1.2 D $800,000 $fill in the blank 10 $fill in the blank 11 fill in the blank 12 % 13.0% 2.5 E $fill in the blank 13 $fill in the blank 14 $250,000 fill in the blank 15 % 16.0% 2.0 b. Which division is most profitable in terms of income from operations? c. Which division is most profitable in terms of return on investment?arrow_forward
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- Return on Investment, Margin, Turnover Data follow for the Consumer Products Division of Kisler Inc.: Sales Operating income Average operating assets Required: Margin Turnover % $9,250,000 Year 1 18,137,255 1. Compute the margin (as a percent) and turnover ratios for each year. Round your answers to two decimal places. Year 1 519,850 % % Year 2 $7,940,000 307,278 17,644,444 Year 2 2. Compute the ROI for the Construction Division for each year. Note: Enter percentage to two decimal places. ROI year 1 ROI year 2 4 X %arrow_forwardwant correct answer for this questionarrow_forwardReturn on Investment, Margin, Turnover Data follow for the Consumer Products Division of Kisler Inc.: Year 1 Year 2 Sales $9,310,000 $7,900,000 Operating income 523,222 305,730 Average operating assets 18,254,902 17,555,556 Required: 1. Compute the margin (as a percent) and turnover ratios for each year. Round your answers two decimal places. Year 1 Year 2 Margin % Turnover 2. Compute the ROI for the Construction Division for each year. Note: Enter percentage to two decimal places. ROI year 1 ROI year 2 %arrow_forward
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