1 Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center) Investment Center Sales Income Average Invested Assets Electronics $ 45,000,000 $ 3,420,000 $ 18,000,000 Sporting goods 25,200,000 2,520,000 14,000,000 Compute profit margin and investment turnover for each department Which department generates the most net income per dollar of sales Which department is most efficient at generating sales from average invested assets Profit Margin Choose Numerator Choose Denominator Profit Margin Investment Center Profit Margin Electronics 0 Sporting Goods 0 Which department generates the most net income per dollar of sales Investment Turnover Choose Numerator Choose Denominator Investment Turnover Investment Center Investment Turnover Electronics 0 Sporting Goods 0 Which department is most efficient at generating sales from average invested assets 2 Oakwood Company produces maple bookcases to customer order The following information is available for the production of the bookcases Process time 7 0 days Inspection time 1 8 days Move time 4 3 days Wait time 17 0 days Required 1 Compute the companys manufacturing cycle time 2 Compute the companys manufacturing cycle efficiency 3 Management believes it can reduce move time by 1 10 days and wait time by 2 50 days by adopting lean manufacturing techniques Compute the companys manufacturing cycle efficiency assuming the companys predictions are correct Manufacturing Cycle Time Time Manufacturing cycle time 0 0 Manufacturing Cycle Efficiency Choose Numerator Choose Denominator Manufacturing cycle efficiency Manufacturing cycle efficiency 0 Manufacturing Cycle Efficiency Choose Numerator Choose Denominator Manufacturing cycle efficiency Manufacturing cycle efficiency 0

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1. Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income

Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center).

Investment Center

Sales

Income

Average Invested Assets

Electronics

45,000,000

3,420,000

18,000,000

Sporting goods

25,200,000

2,520,000

14,000,000

Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?

Profit Margin
	Choose Numerator:	/	Choose Denominator:	=	Profit Margin
Investment Center		/		=	Profit Margin
Electronics		/		=	0
Sporting Goods		/		=	0
Which department generates the most net income per dollar of sales?

Investment Turnover
	Choose Numerator:	/	Choose Denominator:	=	Investment Turnover
Investment Center		/		=	Investment Turnover
Electronics		/		=	0
Sporting Goods		/		=	0
Which department is most efficient at generating sales from average invested assets?

Oakwood Company produces maple bookcases to customer order. The following information is available for the production of the bookcases.


Process time	7.0 days
Inspection time	1.8 days
Move time	4.3 days
Wait time	17.0 days

Required: 1. Compute the companys manufacturing cycle time. 2. Compute the companys manufacturing cycle efficiency. 3. Management believes it can reduce move time by 1.10 days and wait time by 2.50 days by adopting lean manufacturing techniques. Compute the companys manufacturing cycle efficiency assuming the companys predictions are correct.