ROI, Margin, TurnoverAllard, Inc., presented two years of data for its Frozen Foods Division and its Canned Foods Division.Frozen Foods Division:Year 1Year 2Sales$33,520,000 $36,220,000Operating income1,474,880 1,593,680Average operating assets10,000,00010,000,000Canned Foods Division:Year 1Year 2Sales$11,850,000 $12,319,000Operating income628,050529,717Average operating assets5,000,0005,000,000 1. Compute the ROI and the margin and turnover ratios for each year for the Frozen Foods Division.Frozen Foods DivisionROIMarginTurnoverYear 11%%Year 2%%2. Compute the ROI and the margin and turnover ratios for each year for the Canned Foods Division..Canned Foods DivisionROITurnoverMargin%Year 1%Year 2%%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?

Note: Hi! Thank you for the question, As per the honor code, we are allowed to answer three…

ROI, Margin, Turnover 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 $33,520,000 $36,220,000 Operating income 1,474,880 1,593,680 Average operating assets 10,000,000 10,000,000 Canned Foods Division: Year 1 Year 2 Sales $11,850,000 $12,319,000 Operating income 628,050 529,717 Average operating assets 5,000,000 5,000,000

ROI, Margin, Turnover 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 $33,520,000 $36,220,000 Operating income 1,474,880 1,593,680 Average operating assets 10,000,000 10,000,000 Canned Foods Division: Year 1 Year 2 Sales $11,850,000 $12,319,000 Operating income 628,050 529,717 Average operating assets 5,000,000 5,000,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 37P

See similar textbooks

Similar questions

Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year: At the beginning of last year, Elway had 28,300,000 in operating assets. At the end of the year, Elway had 23,700,000 in operating assets. Required: 1. Compute average operating assets. 2. Compute the margin and turnover ratios for last year. (Note: Round the answer for margin ratio to two decimal places.) 3. Compute ROI. (Note: Round answer to two decimal places.) 4. CONCEPTUAL CONNECTION Briefly explain the meaning of ROI. 5. CONCEPTUAL CONNECTION Comment on why the ROI for Elway Company is relatively high (as compared to the lower ROI of a typical manufacturing company).
Forchen, Inc., provided the following information for two of its divisions for last year: 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. Margin c. Turnover d. Return on investment (ROI) 3. What if operating income for the Small Appliances Division was 2,000,000? How would that affect average operating assets? Margin? Turnover? ROI? Calculate any changed ratios (round to four significant digits).
Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%
Xenold, Inc., manufactures and sells cooktops and ovens through three divisions: Home, Restaurant, and Specialty. Each division is evaluated as a profit center. Data for each division for last year are as follows (numbers in thousands): The income tax rate for Xenold, Inc., is 40 percent. Xenold, Inc., has two sources of financing: bonds paying 5 percent interest, which account for 25 percent of total investment, and equity accounting for the remaining 75 percent of total investment. Xenold, Inc., has been in business for over 15 years and is considered a relatively stable stock, despite its link to the cyclical construction industry. As a result, Xenold stock has an opportunity cost of 5 percent over the 4 percent long-term government bond rate. Xenolds total capital employed is 5.04 million (2,600,000 for the Home Division, 1,700,000 for the Restaurant Division, and the remainder for the Specialty Division). Required: 1. Prepare a segmented income statement for Xenold, Inc., for last year. 2. Calculate Xenolds weighted average cost of capital. (Round to four significant digits.) 3. Calculate EVA for each division and for Xenold, Inc. 4. Comment on the performance of each of the divisions.
Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating leverage Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: It is expected that 12,000 units will be sold at a price of 240 a unit. Maximum sales within the relevant range are 18,000 units. Instructions 1. Prepare an estimated income statement for 20Y7. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-even sales. 5. What is the expected margin of safety in dollars and as a percentage of sales? (Round to one decimal place.) 6. Determine the operating leverage.
Communication The Norse Division of Gridiron Concepts Inc. experienced significant revenue and profit growth from 20Y4 to 20Y6 as shown in the following divisional income statements: There are no support department allocations, and the division operates as an investment center that must maintain a 15% return on invested assets. Determine the profit margin, investment turnover, and return on investment for the Norse Division for 20Y420Y6. Based on your computations, write a brief memo to the president of Gridiron Concepts Inc., Knute Holz, evaluating the divisions performance.
A Using Common Size Statements The following income statement and vertical analysis data are available for Riley Manufacturing: Required: 1. CONCEPTUAL CONNECTION Suggest why net income declined from $273,200 to $41,600 while the cost of goods sold percentage decreased each year and selling and administrative expenses remained nearly constant. 2. CONCEPTUAL CONNECTION Determine what could cause sales to decline while the gross margin percentage increases.
ROI, Margin, Turnover 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 $37,180,000 $39,740,000 Operating income 1,561,560 1,669,080 Average operating assets 10,000,000 10,000,000 Canned Foods Division: Year 1 Year 2 Sales $12,430,000 $13,016,000 Operating income 596,640 494,608 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…
ROI and Investment Decisions Jarriot, Inc., presented two years of data for its Furniture Division and its Houseware Division. Furniture Division: Year 1 Year 2 Sales $35,900,000 $37,500,000 Operating income 1,390,000 1,560,000 Average operating assets 2,160,000 2,160,000 Houseware Division: Year 1 Year 2 Sales $11,600,000 $13,000,000 Operating income 620,000 540,000 Average operating assets 5,900,000 5,900,000 At the end of Year 2, the manager of the Houseware Division is concerned about the division’s performance. As a result, he is considering the opportunity to invest in two independent projects. The first is called the Espresso-Pro; it is an in-home espresso maker that can brew regular coffee as well as make espresso and latte drinks. While the market for espresso drinkers is small initially, he believes this market can grow, especially around gift-giving occasions. The second is the Mini-Prep appliance that can be used to do…
ROI and Investment Decisions Jarriot, Inc., presented two years of data for its Furniture Division and its Houseware Division. Furniture Division: Year 1 Year 2 Sales $35,300,000 $38,300,000 Operating income 1,380,000 1,560,000 Average operating assets 8,110,000 8,110,000 Houseware Division: Year 1 Year 2 Sales $11,700,000 $12,800,000 Operating income 670,000 550,000 Average operating assets 5,800,000 5,800,000 At the end of Year 2, the manager of the Houseware Division is concerned about the division’s performance. As a result, he is considering the opportunity to invest in two independent projects. The first is called the Espresso-Pro; it is an in-home espresso maker that can brew regular coffee as well as make espresso and latte drinks. While the market for espresso drinkers is small initially, he believes this market can grow, especially around gift-giving occasions. The second is the Mini-Prep appliance that can be used to do…
ROI, Margin, Turnover Jarriot, Inc., presented two years of data for its Furniture Division and its Houseware Division. Furniture Division: Year 1 Year 2 Sales $33,870,000 $36,210,000 Operating income 1,422,540 1,520,820 Average operating assets 10,000,000 10,000,000 Houseware Division: Year 1 Year 2 Sales $12,590,000 $13,139,800 Operating income 604,320 499,312 Average operating assets 5,000,000 5,000,000 Required: Round the ROI and margin percentages to two decimal places (for example, enter the decimal .10555 as "10.56" percent). Round the turnover ratio to two decimal places. 1. Compute the ROI and the margin and turnover ratios for each year for the Furniture Division. Furniture Division ROI Margin Turnover Year 1 % % Year 2 % % 2. Compute the ROI and the margin and turnover ratios for each year for the Houseware Division. Houseware Division ROI Margin Turnover Year 1 % % Year 2 % %…
A food manufacturer reports the following for two of its divisions for a recent year. ($ millions) Beverage Division Cheese Division Invested assets, beginning $ 2,664 $ 4,457 Invested assets, ending 2,594 4,401 Sales 2,682 3,926 Operating income 350 635 Assume that each of the company’s divisions has a required rate of return of 6%. Compute residual income for each division. (Enter your answers in millions.)