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, 2017, 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 Operating expenses 16,670,000 5,575,000 6,795,000 Invested assets 7,330,000 10,000,000 1,945,000 2,272,500 4,000,000 6,500,000 The management of The Crunchy Granola Company 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. The Crunchy Granola Company Divisional Income Statements For the Year Ended June 30, 2017 Retail Cereal Snack Cake Bakeries Line Item Description Division Division Division Sales Cost of goods sold Gross profit Operating expenses Operating income 2. 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 Profit Margin Investment Turnover % ROI % % % Retail Bakeries Division 3. When faced with limited funds for expansion, management should consider an expansion of the Division first.