Selected sales and operating data for three divisions of a multinational structural engineering firm are provided below: Sales Average operating assets Net operating income Minimum required rate of return Required: 1. Compute the ROI for each division using the formula stated in terms of margin and turnover. 2. Compute the RI for each division. Asia $12,000,000 $3,000,000 $ 420,000 14% Division Europe $14,000,000 $ 5,000,000 $ 400,000 10% North America $25,000,000 $10,000,000 $ 1.000.000 16%
Selected sales and operating data for three divisions of a multinational structural engineering firm are provided below: Sales Average operating assets Net operating income Minimum required rate of return Required: 1. Compute the ROI for each division using the formula stated in terms of margin and turnover. 2. Compute the RI for each division. Asia $12,000,000 $3,000,000 $ 420,000 14% Division Europe $14,000,000 $ 5,000,000 $ 400,000 10% North America $25,000,000 $10,000,000 $ 1.000.000 16%
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing
Section: Chapter Questions
Problem 1CE: Forchen, Inc., provided the following information for two of its divisions for last year: Required:...
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