10.7.8

GHT Tech Inc. sells electronics over the Internet. The Consumer Products Division is organized as a cost center. The budget for the Consumer Products Division for the month ended January 31 is as follows:

Customer service salaries	$546,840
Insurance and property taxes	114,660
Distribution salaries	872,340
Marketing salaries	1,028,370
Engineer salaries	836,850
Warehouse wages	586,110
Equipment depreciation	183,792
Total	$4,168,962

During January, the costs incurred in the Consumer Products Division were as follows:

Customer service salaries	$602,350
Insurance and property taxes	110,240
Distribution salaries	861,200
Marketing salaries	1,085,230
Engineer salaries	820,008
Warehouse wages	562,632
Equipment depreciation	183,610
Total	$4,225,270

Required:

1. Prepare a budget performance report for the director of the Consumer Products Division for the month of January. If an amount box does not require an entry, leave it blank.

GHT Tech Inc.
Budget Performance ReportDirector, Consumer Products Division
For the Month Ended January 31
	Actual	Budget	Over Budget	Under Budget
Customer service salaries	$___	$___	$___	$___
Insurance and property taxes	____	____	____	_____
Distribution salaries	____	____	_____	____
Marketing salaries	____	____	____	____
Engineer salaries	____	____	____	____
Warehouse wages	____	____	____	____
Equipment depreciation	____	___	___	___
Total	$___	$____	$____	$___

GHT Tech is a diversified food company that specializes in all natural foods. The company has three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y7, are as follows:

	Cereal Division		Snack Cake Division		Retail Bakeries Division
Sales	$25,000,000		$8,000,000		$9,750,000
Cost of goods sold	16,670,000		5,575,000		6,795,000
Operating expenses	7,330,000		1,945,000		2,272,500
Invested assets	10,000,000		4,000,000		6,500,000

The management of GHT is evaluating each division as a basis for planning a future expansion of operations.

Required:

1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations.

GHT
Divisional Income Statements
For the Year Ended June 30, 20Y7
	Cereal Division	Snack Cake Division	Retail Bakeries Division
Sales	$___	$____	$____
Cost of goods sold	____	____	____
Gross profit	$____	$____	$____
Operating expenses	_____	____	____
Operating income	$___	$___	$___

Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. If required, round your answers to one decimal place.

Division	Profit Margin	Investment Turnover	ROI
Cereal Division	___%	___	___%
Snack Cake Division	___%	___	____%
Retail Bakeries Division	___%	___	___%