Divisional income statements and return on investment analysis

The Crunchy Granola Company 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 $30,20$Y$7,$ are as follows:

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

Required:

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

The Crunchy Granola Company

Divisional Income Statements

For the Year Ended June $30,20Y7$Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations.

The Crunchy Granola Company

Divisional Income Statements

For the Year Ended June $30,20Y7$

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Theck My Work

For each division, subtract operating expenses from sales.

If required, round your answers to one decimal place.Check My Work

For each division, subtract operating expenses from sales.

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

Cereal Division

Snack Cake Division

Retail Bakeries Division

Cereal Snack Cake Bakeries

Line Item Description

Sales

Cost of goods sold

Gross profit

Operating expenses

Operating income

Division

$

When faced with limited funds for expansion, management should consider an expansion of the Snack Cake $$ Division first.