Yummy Foods Company is a diversified company with three divisions organized as investment centers.

Condensed data taken from the records of the three divisions for the year ended December 31 are as follows:

a. Using the DuPont formula, for return on investment compute the profit margin, investment turnover, and return on investment for each division.

b. Determine the residual income for each division, assuming a minimum acceptable return on investment is 14%.

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Revenues Operating expenses Operating income before support department allocations Support department allocations Operating income Invested assets Snack Goods $ 784,000 (470,400) $313,600 (219,520) $ 94,080 $448,000 Canned Foods $ 940,800 (700,000) $ 240,800 (99,680) $ 141,120 $ 940,800 Frozen Foods $1,050,000 (562,500) $ 487,500 (382,500) $ 105,000 $ 750,000