Question
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Division Queensland New South Wales Sales $ 1,003,000 $ 1,891,000
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below:
| Division | ||
|---|---|---|
| Queensland | New South Wales | |
| Sales | $ 1,003,000 | $ 1,891,000 |
| Average operating assets | $ 590,000 | $ 610,000 |
| Net operating income | $ 90,270 | $ 113,460 |
| Property, plant, and equipment (net) | $ 242,000 | $ 192,000 |
Required:
1. Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover.
2. Which divisional manager seems to be doing the better job?
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Fundamentals of Financial Accounting
Authors: Fred Phillips, Robert Libby, Patricia Libby
4th edition
978-0073369709, 73369705, 78025370, 978-0077444846, 77444841, 978-0078025372
