Managers of three divisions- A, B and C- of Reagan Ltd. delivered following data to Nola Smith,
Question:
Managers of three divisions- A, B and C- of Reagan Ltd. delivered following data to Nola Smith, Chief Executive Officer (CEO). Looking at the data Nola states, “I know headquarters want us to evaluate performance of our divisions based on return on investment, but how come we have missing information!!”
Comparative data:
Departments | |||
A | B | C | |
Sales (a) | $300,000 | $250,000 | $? |
Net operating income (b) | $42,000 | $35,000 | $? |
Average operating assets (all investments in operating assets are expected to earn a minimum return of 9%) | $150,000 | $? | $500,000 |
Margin (b) ÷ (a) | ? | ? | 3.5% |
Turnover (a) ÷ (c) | ? | ? | 2.0 |
Return on investment (d) (ROI) | ? | 7% | ? |
Residual Income | ? | ? | ? |
Required 4.1 Fill in the missing information above. Show your calculation. (11 marks)
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Horngrens Accounting
ISBN: 978-0133855388
10th Canadian edition Volume 2
Authors: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo-Ann L. Johnston, Peter R. Norwood