The Whole Life Baked Goods Company is a diversified food company that specializes in all natural foods. The company has three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y7, are as follows:

	Cereal Division	Snack Cake Division	Retail Bakeries Division
Sales	$26,400,000	$8,420,000	$9,800,000
Cost of goods sold	16,690,000	5,530,000	6,790,000
Operating expenses	7,862,000	2,216,400	2,226,000
Invested assets	13,200,000	1,403,333	3,266,667

The management of The Whole Life Baked Goods Company is evaluating each division as a basis for planning a future expansion of operations.

	Required:
1.	Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges.
2.	Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. If required, round your final answer to one decimal place.
3.	If available funds permit the expansion of operations of only one division, which of the divisions would you recommend for expansion?

1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges.

2. Using the DuPont formula for rate of return on investment, compute the profit margin, investment turnover, and rate of return on investment for each division. If required, round your final answer to one decimal place.

3. If available funds permit the expansion of operations of only one division, which of the divisions would you recommend for expansion?

-Cereal

-Retail Bakeries

OR

-Snack Cake

The Whole Life Baked Goods Company Divisional Income Statements For the Year Ended June 30, 2047 Cereal Division Snack Cake Division Retail Bakeries Division 2 Sales 3 Cost of goods sold + Gross profit 5 Operating expenses 6 Income from operations Division Profit Margin Investment Turnover ROI Cereal Snack Cake Retail Bakeries