Divisional Income Statements and Rate of Return on Investment Analysis

Sunshine Food Company is a diversified food company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 2014, are as follows:

	Cereal Division		Snack Cake Division		Retail Bakeries Division
Sales	$ 1,760,000		$ 1,900,000		$1,690,000
Cost of goods sold	1,070,000		1,180,000		1,000,000
Operating expenses	338,000		302,000		216,800
Invested assets	2,200,000		1,900,000		1,300,000

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

Required:

Hide

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

Sunshine Food Company
Divisional Income Statements
For the Year Ended June 30, 2014
		Cereal Division		Snack Cake Division		Retail Bakeries Division
Sales		$		$		$
Cost of goods sold
Gross Profit		$		$		$
Operating expenses
Income from operations		$		$		$