The Crunchy Granola Company is a diversified food company that specializes in all natural foods. The company has three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y7, are as follows: Line Item Description CerealDivision Snack CakeDivision RetailBakeries Division Sales $25,000,000 $8,000,000 $9,750,000 Cost of goods sold 16,670,000 5,575,000 6,795,000 Operating expenses 7,330,000 1,945,000 2,272,500 Invested assets 10,000,000 4,000,000 6,500,000 The management of The Crunchy Granola Company is evaluating each division as a basis for planning a future expansion of operations. Required: Question Content Area 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. The Crunchy Granola CompanyDivisional Income StatementsFor the Year Ended June 30, 20Y7 Line Item Description CerealDivision Snack CakeDivision RetailBakeriesDivision Sales $Sales $Sales $Sales Cost of goods sold Cost of goods sold Cost of goods sold Cost of goods sold Gross profit $Gross profit $Gross profit $Gross profit Operating expenses Operating expenses Operating expenses Operating expenses Operating income $Operating income $Operating income $Operating income Question Content Area 2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. If required, round your answers to one decimal place. Division Profit Margin Investment Turnover ROI Cereal Division fill in the blank 1 of 9 % fill in the blank 2 of 9 fill in the blank 3 of 9 % Snack Cake Division fill in the blank 4 of 9 % fill in the blank 5 of 9 fill in the blank 6 of 9 % Retail Bakeries Division fill in the blank 7 of 9 % fill in the blank 8 of 9 fill in the blank 9 of 9 % 3. When faced with limited funds for expansion, management should consider an expansion of the Division first.

The Crunchy Granola Company is a diversified food company that specializes in all natural foods. The company has three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y7, are as follows: Line Item Description CerealDivision Snack CakeDivision RetailBakeries Division Sales $25,000,000 $8,000,000 $9,750,000 Cost of goods sold 16,670,000 5,575,000 6,795,000 Operating expenses 7,330,000 1,945,000 2,272,500 Invested assets 10,000,000 4,000,000 6,500,000 The management of The Crunchy Granola Company is evaluating each division as a basis for planning a future expansion of operations. Required: Question Content Area 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. The Crunchy Granola CompanyDivisional Income StatementsFor the Year Ended June 30, 20Y7 Line Item Description CerealDivision Snack CakeDivision RetailBakeriesDivision Sales $Sales $Sales $Sales Cost of goods sold Cost of goods sold Cost of goods sold Cost of goods sold Gross profit $Gross profit $Gross profit $Gross profit Operating expenses Operating expenses Operating expenses Operating expenses Operating income $Operating income $Operating income $Operating income Question Content Area 2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. If required, round your answers to one decimal place. Division Profit Margin Investment Turnover ROI Cereal Division fill in the blank 1 of 9 % fill in the blank 2 of 9 fill in the blank 3 of 9 % Snack Cake Division fill in the blank 4 of 9 % fill in the blank 5 of 9 fill in the blank 6 of 9 % Retail Bakeries Division fill in the blank 7 of 9 % fill in the blank 8 of 9 fill in the blank 9 of 9 % 3. When faced with limited funds for expansion, management should consider an expansion of the Division first.

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

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Line Item Description	Cereal Division	Snack Cake Division	Retail Bakeries Division
Sales	$25,000,000	$8,000,000	$9,750,000
Cost of goods sold	16,670,000	5,575,000	6,795,000
Operating expenses	7,330,000	1,945,000	2,272,500
Invested assets	10,000,000	4,000,000	6,500,000

Question Content Area

1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations.

The Crunchy Granola CompanyDivisional Income StatementsFor the Year Ended June 30, 20Y7

Line Item Description	Cereal Division	Snack Cake Division	Retail Bakeries Division
Sales	$Sales	$Sales	$Sales
Cost of goods sold	Cost of goods sold	Cost of goods sold	Cost of goods sold
Gross profit	$Gross profit	$Gross profit	$Gross profit
Operating expenses	Operating expenses	Operating expenses	Operating expenses
Operating income	$Operating income	$Operating income	$Operating income

Question Content Area

2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. If required, round your answers to one decimal place.

Division	Profit Margin	Investment Turnover	ROI
Cereal Division	fill in the blank 1 of 9 %	fill in the blank 2 of 9	fill in the blank 3 of 9 %
Snack Cake Division	fill in the blank 4 of 9 %	fill in the blank 5 of 9	fill in the blank 6 of 9 %
Retail Bakeries Division	fill in the blank 7 of 9 %	fill in the blank 8 of 9	fill in the blank 9 of 9 %

3. When faced with limited funds for expansion, management should consider an expansion of the

Division first.

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