Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Profit Margin, Investment Turnover, and return on investment The condensed income statement for the Consumer Products Division of Fargo Industries Inc. is as follows (assuming

image text in transcribed
image text in transcribed
Profit Margin, Investment Turnover, and return on investment The condensed income statement for the Consumer Products Division of Fargo Industries Inc. is as follows (assuming no service department charges): Sales $1,072,000 Cost of goods sold 482,400 Gross profit $589,600 Administrative expenses 214,400 Income from operations $375,200 The manager of the Consumer Products Division is considering ways to increase the return on investment. a. Using the DuPonit formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $2,680,000 of assets have been invested in the Consumer Products Division. Round the investment turnover to one decimal place. Profit margin Investment turnover Rate of return on investment b. If expenses could be reduced by $53,600 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? Round the 8:30 PM investment turnover to one decimal place. ( P 7/27/201 Administrative expenses 214,400 Income from operations $375,200 The manager of the Consumer Products Division is considering ways to increase the return on investment. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $2,680,000 of assets have been invested in the Consumer Products Division. Round the investment turnover to one decimal place. a. Profit margin Investment turnover Rate of return on investment b. If expenses could be reduced by $53,600 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? Round the investment turnover to one decimal place. Profit margin Investment turnover Rate of return on investment Next Previous

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting With Ready Notes

Authors: Ronald W. Hilton

1st Edition

0075619733, 978-0075619734

More Books

Students also viewed these Accounting questions

Question

What is paper chromatography?

Answered: 1 week ago

Question

Explain the cost of capital.

Answered: 1 week ago

Question

Define capital structure.

Answered: 1 week ago