Chapter 14, Problem 3SEQ

### Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

Chapter
Section

### Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

# 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%

To determine

Concept Introduction:

Return on investment (ROI):

Return on investment is a profitability ratio that represents the percentage return on the investment made. It is calculated by dividing the Net Income by the Average total assets. The formulas to calculate the ROI are as follows:

ROI = Operating IncomeAverage total assets

ROI (Expanded)= Operating IncomeSales ×SalesAverage total assets

Or

ROI = Profit Margin Ratio ×Asset Turnover ratio

To Calculate:

The Return on Investment for Division A

Explanation

The Return on Investment for Division A is calculated as follows:

Sales 					$350,000 Less: Cost of Goods Sold$200,000
Less: O...

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started