1.

Profit Margin, Investment Turnover, and ROI

Campbell Company has income from operations of $55,104, invested assets of $164,000, and sales of $459,200. Use the DuPont formula to compute the rate of return on investment. If required, round your answers to one decimal place.

a. Profit margin

%

b. Investment turnover

c. Rate of return on investment

2. The materials used by the Winston-Salem Division of Fox Company are currently purchased from outside suppliers at $39 per unit. These same materials are produced by Fox's Flagstaff Division. The Flagstaff Division can produce the materials needed by the Winston-Salem Division at a variable cost of $18 per unit. The division is currently producing 77,000 units and has capacity of 110,000 units. The two divisions have recently negotiated a transfer price of $28 per unit for 33,000 units.

By how much will each division's income increase as a result of this transfer?

Winston-Salem Division	$
Flagstaff Division	$

%