Please send answer in chart formatMegamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment CenterSales Income AverageInvested AssetsElectronics$39,840,000 $2,988,000 $16,600,000 Sporting goods 25,200,000 2,142,000 12,600,000 Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets? Profit MarginInvestmentTurnoverCompute profit margin for each department. Which department generates the most net income per dollar of sales?Profit MarginChoose Numerator:I Choose Denominator:Profit MarginInvestment CenterProfit MarginElectronics=Sporting Goods%3DWhich department generates the most net income per dollar of sales?< Profit MarginInvestment Turnover >InvestmentProfit MarginTurnoverCompute investment turnover for each department. Which department is most efficient at generating sales from averageinvested assets?Investment TurnoverChoose Numerator:I Choose Denominator:= Investment TurnoverInvestment CenterElectronicsSporting GoodsWhich department is most efficient at generating sales from average investedInvestment Turnoverassets?< Profit MarginInvestment Turnover

Profit Margin = Net income / Sales Investment Turnover = Sales / Average Invested Assets

Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income Average Invested Assets Electronics $ 39,840,000 $ 2,988,000 $ 16,600,000 Sporting goods 25,200,000 2,142,000 12,600,000 Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?

Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income Average Invested Assets Electronics $ 39,840,000 $ 2,988,000 $ 16,600,000 Sporting goods 25,200,000 2,142,000 12,600,000 Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 6SEB

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Investment Center Sales. Net income Average invested assets Profit margin Investment turnover Return on investment Profit Margin: Investment Center A B Investment Turnover: Investment Center A B Choose Numerator: Investment Center Use the information in the table above to compute each department's contribution to overhead (both in dollars and as a percent). (Round your final answers to 2 decimal places.) Return on investment: A B Choose Numerator: Choose Numerator: 1 A 1 $ $ 584,600 $1,580,000 ? 1 10% ? ?% B $12,200,000 $ $ 1 Choose Denominator: Choose Denominator: 1 Choose Denominator: ? ? ?% 1.3 13% = Profit Margin Profit margin 10.00 % % = Investment Turnover = Investment turnover 1.30 Return on investment = Return on investment % 13.00 %
Megamart provides the following information on its two investment centers. Investment Center Electronics Sporting goods Sales $ 63,460,000 19,050,000 Income $ 3,173,000 2,286,000 Average Assets $ 16,700,000 12,700,000 Exercise 22-11 (Algo) Computing profit margin and investment turnover LO A2 Compute profit margin and investment turnover for each center. Which center generates more income per dollar of sales? Which center has the better investment turnover?
Sales Margin = choose your answer... choose your answer... choose your answer... Operating Income 4 Total Assets Sales Revenue choose your answer... choose your answer... レ Return on Investment (ROI) = choose your answer...
Profit Margin, Investment Turnover, and Return on Investment The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department allocations): Sales Cost of goods sold Gross profit Administrative expenses Operating income The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $143,750,000 of assets have been invested in the Consumer Products Division. If required, round your answers to one decimal place. Profit margin $230,000,000 (126,500,000) $103,500,000 (64,400,000) $39,100,000 Investment turnover Return on investment % Investment turnover Return on investment b. If expenses could be reduced by $3,450,000 without decreasing sales, what would be the impact on the profit margin, investment…
Please send answer in chart set up Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income AverageInvested Assets Electronics $ 39,840,000 $ 2,988,000 $ 16,600,000 Sporting goods 25,200,000 2,142,000 12,600,000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company?2. Assume a target income level of 11% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company?3. Assume the Electronics department is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted?
Profit margin for an Investment center measures: Multiple Cholce Departmental contribution to overhead. How efficiently an investment center generates sales from its invested assets. Investment center income earned per dollar of sales. Investment center income compared to target investment center income. Investment center income generated from its invested assets.
Tom and Jerry are both managers of sales teams at Flint Corp., a furniture company whose most popular item is a tweed couch. Tom and Jerry are very competitive and each attempt to outperform one another every year. Currently, Tom's department has better metrics, which has resulted in larger bonuses for Tom and his team. Flint Corp. evaluates both departments based upon each team's respective return on investment and economic value added. The departments reported the following financial data during the most recent year: Operating Income Sales Average Operating Assets Total Assets Current Liabilities Jerry $125,613 $2,791,400 $953,900 $1,103,880 $208,630 Tom $183,995 $3,679,900 $1,321,120 $1,521,480 $296,860 It should be noted that Flint uses average operating assets as its definition of investment, and it has a minimum required rate of return of 8.72% and a tax rate of 22%. Flint has used a variety of ways to acquire capital and has the current makeup: proportion of equity is 38%, the…
Profit Margin, Investment Turnover, and return on investment The condensed income statement for the Consumer Products Division of Fargo Industries Inc. is as follows (assuming no service department charges): Sales Cost of goods sold Gross profit Administrative expenses Income from operations The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $1,950,000 of assets have been invested in the Consumer Products Division. Round the investment turnover to one decimal place. Profit margin Investment turnover Rate of return on investment Profit margin Investment turnover $1,170,000 526,500 $643,500 409,500 $234,000 b. If expenses could be reduced by $58,500 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on…
Describing the balanced scorecard and identifying key performance indicators for each perspective Consider the following key performance indicators, and classify each according to the balanced scorecard perspective it addresses. Choose from a financial perspective, customer perspective, internal business perspective, or learning and growth perspective. Number of employee suggestions implemented Revenue growth Number of on-time deliveries Percentage of salesforce with access to real-time inventory levels Customer satisfaction ratings Number of defects found during the manufacturing Number of warranty claims Return on investment Variable cost per unit Percentage of market share Number of hours of employee training Number of new products developed Yield rate (number of units produced per hour) Average repair time Employee satisfaction Number of repeat customers
Exercise 10-12 Evaluating New Investments Using Return on Investment (ROI) and Residual Income (LO10-1, LO10-2] Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A $ 6,300,000 $ 1,260,000 340,200 Division B $ 10,300,000 $ 5,150,000 968,200 18.80% Division C $ 9,400,000 $ 1,880,000 24 Sales Average operating assets Net operating income Minimum required rate of return 2$ 249,100 20.00% 17.00% Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover. 2. Compute the residual income (loss) for each division. 3. Assume that each division is presented with an investment opportunity that would yield a 20% rate of return. a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity? b. If performance is being measured by residual income, which division or divisions will probably accept or…
What can the weighted average contribution margin ratio be used for? To solve for a measure, at any level of sales volume, of the sensitivity of operating profit to changes in volume. Breakeven and profit planning for sales volume expressed in dollars (Y) rather than units (Q). To calculate an average per-unit contribution margin based on an assumed sales mix. To figure out the relative proportion in which a company’s products (or services) are sold. To determine the extent of fixed costs in an organization’s cost structure.
What can the weighted average contribution margin ratio be used for? Multiple Choice To solve for a measure, at any level of sales volume, of the sensitivity of operating profit to changes in volume. Breakeven and profit planning for sales volume expressed in dollars (Y) rather than units (Q). To calculate an average per-unit contribution margin based on an assumed sales mix. To figure out the relative proportion in which a company’s products (or services) are sold. To determine the extent of fixed costs in an organization’s cost structure.