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As the sales manager of the M.N.O. Company, you are trying to evaluate the perfor- mance of two districts. You have decided to look
As the sales manager of the M.N.O. Company, you are trying to evaluate the perfor- mance of two districts. You have decided to look at how each district has managed its assets employed in the selling function. Your task is to determine each district's ROAM. District 1 District 2 Sales Cost of goods sold $800,000 $500,000 624,000. 390,000 Gross margin 176,000 110,000 Variable district expenses: Salaries $49,600 $31,000 Commissions 8,000 5,000 Office expenses 9,600 6,000 Travel 12,800 8,000 Total expenses 80,000 50,000 Net profit (loss) 96,000 60,000 District investment in assets: Accounts receivable 120,000 45,000 Inventories 200,000 80,000 Earnings as a percentage of sales 0.12 0.12 Turnover 2.5 4.0
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