The condensed income statement for the Consumer Products Division of Bantastic Industries Inc. is as follows (assuming no service department charges):

Sales

16,000,000

Cost of goods sold

11,660,000

Gross profit

4,340,000

Administrative expenses

2,100,000

Income from operations

2,240,000

The manager of the Consumer Products Division is considering ways to increase the rate of return on investment.

1. Using the DuPont formula for rate of return on investment, determine the profit margin, investment turnover, and rate of return on investment of the Consumer Products Division, assuming that $8,000,000 of assets have been invested in the Consumer Products Division.

1. If expenses could be reduced by $320,000 without decreasing sales, what would be the impact on the profit margin, investment turnover, and rate of return on investment for the Consumer Products Division?

How do i calculate the information above?