1. Wellington Woolens Company reported a 6% operating margin on sales, a 12% pretax operating return on...

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1. Wellington Woolens Company reported a 6% operating margin on sales, a 12% pretax operating return on total assets, and $500 million of average total assets. Compute the 

(a) Operating income, 

(b) Total sales, and 

(c) Total asset turnover.

2. Osaka Electronics Corporation reported ¥200 million of sales, ¥20 million of operating income, and a total asset turnover of four times. (¥ is Japanese yen.) Compute the

(a) Total assets, 

(b) Operating return on sales, and 

(c) Pretax operating return on total assets.

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Introduction to Management Accounting

ISBN: 978-0133058789

16th edition

Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta

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