Question: Exercise 11-8 Computing and Interpreting Return on Investment (ROI) [LO11-1] Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below:
Exercise 11-8 Computing and Interpreting Return on Investment (ROI) [LO11-1]
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below:
| Division | ||||
| Queensland | New South Wales | |||
| Sales | $ | 2,079,000 | $ | 3,224,000 |
| Average operating assets | $ | 630,000 | $ | 620,000 |
| Net operating income | $ | 166,320 | $ | 209,560 |
| Property, plant, and equipment (net) | $ | 263,000 | $ | 213,000 |
Required:
1. Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover.
2. Which divisional manager seems to be doing the better job?
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