1. Kentucky Distributors has two divisions Northern and Southern. The divisions have provided the following financial information:

	Northern	Southern
Sales	$150,000	$210,000
Variable costs	95,000	110,000
Common fixed costs	65,000	75,000
Operating income	($ 10,000)	$ 25,000

Kentuckys executives are considering the elimination of the Northern division. If the division is eliminated, the common fixed costs will remain unchanged. Given these data, should the Northern division be eliminated? Why?

2.

Logan Corporation reported the following operating data for the past year:

Sales	$400,000
Net operating income	20,000
Total liabilities, December 31	130,000
Assets, January 1	150,000
Assets, December 31	170,000

Required:

Calculate Logans margin.

Calculate Logans asset turnover.

Calculate Logans ROI.