Allard, Inc., presented two years of data for its Frozen Foods Division and its Canned Foods Division. Frozen Foods Division: Year 1 Year 2 Sales $34,850,000 $37,540,000 Operating income 1,359,150 1,464,060 Average operating assets 10,000,000 10,000,000 Canned Foods Division: Year 1 Year 2 Sales $11,270,000 $11,837,800 Operating income 540,960 449,836 Average operating assets 5,000,000 5,000,000 Required: Round the ROI and margin percentages to two decimal places (for example, enter the decimal .10555 as "10.56" percent). Round the turnover ratio to two decimal places. 1. Compute the ROI and the margin and turnover ratios for each year for the Frozen Foods Division. Frozen Foods Division ROI Margin Turnover Year 1 fill in the blank 1 % fill in the blank 2 % fill in the blank 3 Year 2 fill in the blank 4 % fill in the blank 5 % fill in the blank 6 2. Compute the ROI and the margin and turnover ratios for each year for the Canned Foods Division. Canned Foods Division ROI Margin Turnover Year 1 fill in the blank 7 % fill in the blank 8 % fill in the blank 9 Year 2 fill in the blank 10 % fill in the blank 11 % fill in the blank 12 3. Indicate the reason for change in ROI from Year 1 to Year 2 for the Frozen Foods Division. Indicate the reason for change in ROI from Year 1 to Year 2 for the Canned Foods Division.

Cornerstones of Cost Management (Cornerstones Series)

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Author:Don R. Hansen, Maryanne M. Mowen

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Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

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Problem 7E: Jarriot, Inc., presented two years of data for its Furniture Division and its Houseware Division....

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Allard, Inc., presented two years of data for its Frozen Foods Division and its Canned Foods Division.

Frozen Foods Division:

	Year 1	Year 2
Sales	$34,850,000	$37,540,000
Operating income	1,359,150	1,464,060
Average operating assets	10,000,000	10,000,000

Canned Foods Division:

	Year 1	Year 2
Sales	$11,270,000	$11,837,800
Operating income	540,960	449,836
Average operating assets	5,000,000	5,000,000

Required:

Round the ROI and margin percentages to two decimal places (for example, enter the decimal .10555 as "10.56" percent). Round the turnover ratio to two decimal places.

1. Compute the ROI and the margin and turnover ratios for each year for the Frozen Foods Division.

	Frozen Foods Division

	ROI	Margin	Turnover

Year 1	fill in the blank 1 %	fill in the blank 2 %	fill in the blank 3
Year 2	fill in the blank 4 %	fill in the blank 5 %	fill in the blank 6

2. Compute the ROI and the margin and turnover ratios for each year for the Canned Foods Division.

	Canned Foods Division

	ROI	Margin	Turnover

Year 1	fill in the blank 7 %	fill in the blank 8 %	fill in the blank 9
Year 2	fill in the blank 10 %	fill in the blank 11 %	fill in the blank 12

3. Indicate the reason for change in ROI from Year 1 to Year 2 for the Frozen Foods Division.

Indicate the reason for change in ROI from Year 1 to Year 2 for the Canned Foods Division.

4. Which of the data analytic types—descriptive, diagnostic, predictive or prescriptive—is Allard using in comparing Year 1 to Year 2 for the ratios?

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