Question
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Division Queensland New South Wales Sales $ 1,302,000 $ 2,444,000
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below:
| Division | ||||
| Queensland | New South Wales | |||
| Sales | $ | 1,302,000 | $ | 2,444,000 |
| Average operating assets | $ | 620,000 | $ | 520,000 |
| Net operating income | $ | 71,610 | $ | 61,100 |
| Property, plant, and equipment (net) | $ | 239,000 | $ | 189,000 |
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?
Step by Step Solution
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Step: 1
Answer Explanation 1 Margin Queensland 55 New South Wales 25 Turnover ...
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Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
13th Edition
978-0073379616, 73379611, 978-0697789938
