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Dixie Company has the following data for 2011: Division A Sales $400,000 Contribution margin- 160,000 Operating income - 80,000 Average operating assets- 320,000 Division B
Dixie Company has the following data for 2011:
Division A
Sales $400,000
Contribution margin- 160,000
Operating income - 80,000
Average operating assets- 320,000
Division B
Sales $300,000
Contribution margin- 125,000
Operating income - 30,000
Average operating assets- 200,000
Dixie Company has a target ROI of 20 percent.
Required: Calculate the following amounts for EACH division:
A. Margin ratio
B. Turnover ratio
C. ROI
D. Residual Income
E. Evaluate the performance of these 2 division managers.
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