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Sprinkles Inc. has two different product lines, cupcakes and cookies. The following is the most recent financial information: Total sales Net operating income Cupcakes
Sprinkles Inc. has two different product lines, cupcakes and cookies. The following is the most recent financial information: Total sales Net operating income Cupcakes $1,000,000 Cookies $600,000 Average operating assets $90,000 $500,000 $45,000 $300,000 The company has indicated that the minimum required return for any product line it offers is 16%. Required: a. Compute the ROI of each product line stated in terms of margin and turnover. Round to one decimal place. Which product line appears to be doing better and why? (6 marks) Margin Turnover ROI Better product line: Reason: Cupcakes Cookies
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