1.The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows...

1.The condensed income statement for the Consumer Products Division of Tri-State Industries Inc. is as follows (assuming no support department allocations):

Sales	$1,232,000
Cost of goods sold	(554,400)
Gross profit	$677,600
Administrative expenses	(431,200)
Operating income	$246,400

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

a. Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment of the Consumer Products Division, assuming that $3,080,000 of assets have been invested in the Consumer Products Division. Round the investment turnover to one decimal place.

Profit margin	%
Investment turnover
Return on investment	%

b. If expenses could be reduced by $61,600 without decreasing sales, what would be the impact on the profit margin, investment turnover, and return on investment for the Consumer Products Division? Round the investment turnover to one decimal place.

Profit margin	%
Investment turnover
Return on investment	%

2. Data are presented in the following table of returns on investment and residual incomes:

Invested Assets	Operating Income	Return on Investment	Minimum Return on Investment	Minimum Acceptable Operating Income	Residual Income
$820,000	$213,200	(a)	15%	(b)	(c)
$560,000	(d)	(e)	(f)	$61,600	$28,000
$330,000	(g)	14%	(h)	$33,000	(i)
$250,000	$50,000	(j)	12%	(k)	(l)

Determine the missing items, identifying each item by the appropriate letter. For all amounts, round to the nearest whole number.

a.		%
b.	$
c.	$
d.	$
e.		%
f.		%
g.	$
h.		%
i.	$
j.		%
k.	$
l.	$

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ekkarill92 answered 2 years ago

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