The Millard Division's operating data for the past two years are provided below:
| Year 1 | Year 2 | ||||||||||
| Return on investment | 10 | % | 24 | % | |||||||
| Net operating income | ? | $ | 680,000 | ||||||||
| Turnover | ? | 4 | |||||||||
| Margin | ? | ? | |||||||||
| Sales | $ | 3,360,000 | ? | ||||||||
Millard Division's margin in Year 2 was 120% of the margin in Year 1.
The net operating income for Year 1 was:
Garrison 16e Rechecks 2017-10-31
Multiple Choice
$201,600
$168,000
$403,200
$340,000
| year 2 | |||||
| ROI = margin * turnover | |||||
| 24% = x *4 | |||||
| so margin = 6% | |||||
| year 1 | |||||
| margin of year 2 is 120 % margin in year 1 | |||||
| so margin of year 1 = 6/120%*100% | |||||
| 5 | % | ||||
| Margin = net operating income/sales | |||||
| 5% = x /3,360,000 | |||||
| x = 3,360,000*5% | |||||
| 168000 | answer | ||||
Get Answers For Free
Most questions answered within 1 hours.