Question: Dixie Company has the following data for 2011: Division A Sales $400,000 Contribution margin- 160,000 Operating income - 80,000 Average operating assets- 320,000 Division B

Dixie Company has the following data for 2011:

Division A

Sales $400,000

Contribution margin- 160,000

Operating income - 80,000

Average operating assets- 320,000

Division B

Sales $300,000

Contribution margin- 125,000

Operating income - 30,000

Average operating assets- 200,000

Dixie Company has a target ROI of 20 percent.

Required: Calculate the following amounts for EACH division:

A. Margin ratio

B. Turnover ratio

C. ROI

D. Residual Income

E. Evaluate the performance of these 2 division managers.

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