the Vice President Of operations

Divisional performance analysis and evaluation Obj. 4 PR 23-5B The vice president of operations of Free Ride Bike Company is evaluating the performance of two divisions organize as investment centers. Invested assets and conde sed income statement data for the past year for each division are as follows 2. Road Bike sion ROL 12.0% Road Bike DivisionMountain Bike Division $1,728,000 1,380,000 175,200 1,440,000 1,760,000 1,400,000 236,800 800,000 W EXCEL TEMPLATE Cost of goods sold Operating expenses Invested assets Instructions 1. Prepare condensed divisional income statements for the year ended December 31, 20v7, assuming that there were no service department charges. 2. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for each division. (Round percentages and the invest- 3. If management's minimum acceptable return on investment is 10%, determine the residual 4.Discuss the evaluation of the two divisions, using the performance measures de- ment turnover to one decimal place.) income for each division. termined in parts (1), (2), and (3)