Question

Bridgeport, Inc., reported the following results for last year. Liles Division Marston Division Outland Division Net...

Bridgeport, Inc., reported the following results for last year.

Liles Division Marston Division Outland Division
Net operating income $127,000 $55,200 $243,000
Sales revenue 600,000 150,000 1,200,000
Average operating assets 1,040,000 300,000 1,518,000


(a) Calculate margin for each division. (Round answers to 1 decimal place, e.g. 5.1%.)

Margin
Liles %
Marston %
Outland %


Which division generates the highest margin?


Outland
Liles
Marston

(b) Calculate ROI for each division. (Round answers to 1 decimal place, e.g. 5.1%.)

Return on Investment
Liles
%
Marston
%
Outland
%


If the divisions are evaluated based on return on investment, which division is doing the best job?


Marston
Outland
Liles

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The South Division of Wiig Company reported the following data for the current year. Sales $2,929,000...
The South Division of Wiig Company reported the following data for the current year. Sales $2,929,000 Variable costs 1,933,140 Controllable fixed costs 603,800 Average operating assets 5,093,400 Top management is unhappy with the investment center’s return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 1. Increase sales by $319,000 with no change in...
Forchen, Inc., provided the following information for two of its divisions for last year: Small Appliances...
Forchen, Inc., provided the following information for two of its divisions for last year: Small Appliances Division Cleaning Products Division Sales $41,604,000 $34,800,000 Operating income 3,744,360 1,392,000 Operating assets, January 1 6,394,000 5,600,000 Operating assets, December 31 7,474,000 6,000,000 Required: 1. For the Small Appliances Division, calculate: a. Average operating assets $ ____ b. Margin ____ % c. Turnover d. Return on investment (ROI) ____ % 2. For the Cleaning Products Division, calculate: a. Average operating assets $ ____ b....
The South Division of Wiig Company reported the following data for the current year. Sales $2,950,000...
The South Division of Wiig Company reported the following data for the current year. Sales $2,950,000 Variable costs 1,947,000 Controllable fixed costs 595,000 Average operating assets 5,000,000 Top management is unhappy with the investment center’s return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 1. Increase sales by $300,000 with no change in...
The South Division of Wiig Company reported the following data for the current year. Sales $3,000,000...
The South Division of Wiig Company reported the following data for the current year. Sales $3,000,000 Variable costs 2,010,000 Controllable fixed costs 605,000 Average operating assets 5,000,000 Top management is unhappy with the investment center’s return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 1. Increase sales by $300,000 with no change in...
Westerville Company reported the following results from last year’s operations:   Sales $ 1,200,000       Variable expenses 420,000...
Westerville Company reported the following results from last year’s operations:   Sales $ 1,200,000       Variable expenses 420,000       Contribution margin 780,000       Fixed expenses 600,000       Net operating income $ 180,000       Average operating assets $ 600,000     This year, the company has a $137,500 investment opportunity with the following cost and revenue characteristics:   Sales $ 220,000   Contribution margin ratio 60 % of sales   Fixed expenses $ 99,000 The company’s minimum required rate of return is 20%. 1. What is last year's...
Presented below is selected information for two divisions of Juliana Company: Eastern Western Sales $600,000 $750,000...
Presented below is selected information for two divisions of Juliana Company: Eastern Western Sales $600,000 $750,000 Controllable margin 50,000 70,000 Average operating assets 100,000 200,000 Calculate the return on investment for each division. (Round answers to 2 decimal places, e.g. 15.25%.) Return on investment Eastern division % Western division % What is the residual income for each division if the required rate of return is 12%? Residual Income Eastern division $ Western division $
The Scarf division of Wintertime Inc. reported the following results from last year’s operations: Sales    $1,000,000...
The Scarf division of Wintertime Inc. reported the following results from last year’s operations: Sales    $1,000,000 Variable expenses       700,000 Contribution margin    300,000 Fixed expenses            200,000 Net operating income $100,000 Average operating assets $1,000,000 At the beginning of the year the Scarf division had a $200,000 investment opportunity with the following characteristics: Sales $300,000 Contribution margin ratio 40% of sales Fixed expenses $60,000 If the division pursues the investment opportunity and otherwise performs the same as last year, the combined (new)...
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Division...
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Division Queensland New South Wales Sales $ 855,000 $ 2,200,000 Average operating assets $ 570,000 $ 550,000 Net operating income $ 44,460 $ 48,400 Property, plant, and equipment (net) $ 244,000 $ 194,000 Required: 1. Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover. 2. Which divisional manager seems to be doing...
ROI and Residual Income:Basic Computations Watkins Associated Industries is a highly diversified company with three divisions:...
ROI and Residual Income:Basic Computations Watkins Associated Industries is a highly diversified company with three divisions: Trucking, Seafood, and Construction. Assume that the company uses return on investment and residual income as two of the evaluation tools for division managers. The company has a minimum desired rate of return on investment of 10 percent with a 30 percent tax rate. Selected operating data for three divisions of the company follow. Trucking Division Seafood Division Construction Division Sales $1,200,000 $780,000 $900,000...
Return on Investment, Margin, Turnover Data follow for the Construction Division of D. Jack Inc.: Year...
Return on Investment, Margin, Turnover Data follow for the Construction Division of D. Jack Inc.: Year 1 Year 2 Sales $148,500,000 $162,250,000 Operating income 8,910,000 8,112,500 Average operating assets 337,500,000 405,625,000 (Note: If required, round your answers to two decimal places.) Required: 1. Compute the margin (as a percent) and turnover ratios for each year. Year 1 Year 2 Margin % % Turnover 2. Compute the ROI (as a percent) for the Construction Division for each year. ROI year 1...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT