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Household Products is a division of Delaware Electronics. The division had the following performance targets for 2010: Asset turnover 3.1 Profit margin 6% Target rate
Household Products is a division of Delaware Electronics. The division had the following performance targets for 2010: Asset turnover 3.1 Profit margin 6% Target rate of return on investments for RI 15% Cost of capital 9% Income tax rate 35% At the end of 2010, the following actual information concerning the company's perfor- mance is available: Total assets at beginning of year $24,800,000 Total assets at end of year 29,600,000 Average fair market value of invested capital for year 36,000,000 Sales 68,000,000 Variable operating costs 34,800,000 Direct fixed costs 27,440,000 Allocated fixed costs 2,700,000 Required: a. Compute the 2010 segment margin and average assets for Houschold Products. b. Based on segment margin and average assets, compute the profit margin, asset turnover, and ROI
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