Exhibit 11-2

Manford Inc. has two divisions Refrigerators and Dish Washer.

Manford Company
Segmented Income Statements
For the Current Fiscal Year Ended December 31
	Refrigerator Division	Dish Washer Division
Sales	$10,000,000	$5,400,000
Cost of goods sold	4,200,000	2,660,000
Gross margin	5,800,000	2,740,000
Allocated overhead (from corporate)	940,000	740,000
Selling and administrative expenses	780,000	360,000
Operating income	4,080,000	1,640,000
Income tax expense (45%)	1,836,000	738,000
Net income	$ 2,244,000	$ 902,000

59. Refer to Exhibit 11-2. Using the segmented income statements, what is the profit margin ratio for the Refrigerator Division (to the nearest hundredth of a percent)?

a. 22.44%

b. 40.80%

c. 58.00%

d. 42.00%

e. None of the answer choices is correct.

60. Refer to Exhibit 11-2. Using the segmented income statements, what is the profit margin ratio for the Dish Washer Division (to the nearest hundredth of a percent)?

a. 30.37%

b. 50.74%

c. 16.70%

d. 49.26%

e. None of the answer choices is correct.

61. Refer to Exhibit 11-2. Assume the Refrigerator Division has average operating assets totaling $24,000,000 for the year. What is the division's return on investment (to the nearest hundredth of a percent)?

a. 40.80%

b. 17.00%

c. 24.17%

d. 58.00%

e. None of the answer choices is correct.

62. Refer to Exhibit 11-2. Assume the Refrigerator Division has average operating assets totaling $24,000,000 for the year and the company's cost of capital rate is 15 percent. What is the residual income for the Refrigerator division?

a. $2,200,000

b. $2,580,000

c. $6,400,000

d. $480,000

e. None of the answer choices is correct.

63. Refer to Exhibit 11-2. Assume the Dish Washer Division has average operating assets totaling $6,560,000 for the year and the company's cost of capital rate is 15 percent. What is the residual income for the Dish Washer division?

a. $656,000

b. $4,744,000

c. $246,000

d. $2,084,000

e. None of the answer choices is correct.