Consider the following information regarding the operations of Owen Glass Company's South division for last year:...

Consider the following information regarding the operations of Owen Glass Company's South division for last year:


Sales	$	7,000,000
Cost of goods sold		3,200,000
Allocated corporate overhead		250,000
Administrative costs		820,000
General costs		500,000
Tax rate		45	%

What is the division's gross margin percentage?

Expert Solution

The Gross Margin Ratio, also known as the gross profit margin ratio, is a profitability ratio that compares the gross margin of a company to its revenue. It shows how much profit a company makes after paying off its Cost of Goods Sold (COGS)

To make the margin a percentage, multiply the result by 100

Gross Margin Ratio = (Revenue – COGS) / Revenue

Gross profit =(Revenue – COGS)

Colby Messinger answered 3 years ago

The following information relates to the Quilt Division of TDS Corporation for last year: Sales $...

The following information relates to the Quilt Division of TDS Corporation for last year: Sales $ 200,000 Contribution margin $ 90,000 Net operating income $ 65,000 Average operating assets $ 500,000 Minimum required rate of return 10 % Assume that Quilt was being evaluated solely on the basis of residual income. Which of the following investment opportunities would Quilt want to invest in? An investment that generates a return of 12% An investment that generates a return of 16% A)...

Company ABC has a TV division and a PC division. The following information relates to last...

Company ABC has a TV division and a PC division. The following information relates to last year's operations at each division. The minimum required rate of return is the same for both divisions. TV PC Sales $10,000 (d) Average operating assets $20,000 (e) Net operating income (a) $10,000 Residual Income $3,000 (f) Margin (b) 5% Turnover (c) 2 Return on Investment (ROI) 20% (g) Company ABC tracks the time of processing orders. The average times were recorded as follows: Queue...

Skiller Company has the following information regarding its inventory for the second year of operations. Transactions...

Skiller Company has the following information regarding its inventory for the second year of operations. Transactions Units Sales in units Unit Cost Beginning Inventory, January 1 35,000 $3.50 Purchases February 8 45,500 3.60 March 15 100,250 3.80 April 10 62,000 4.10 Units sold- April 22 at $12 155,000 Purchases May 9 81,000 4.35 June 19 28,000 4.56 Units sold- August 11 at $14 115,000 Purchases September 30 15,000 4.75 October 30 41,000 4.85 November 17 8,000 4.90 Units sold-December 21...

Dropping Unprofitable Division Based on the following analysis of last year’s operations of Groves, Inc., a...

Dropping Unprofitable Division Based on the following analysis of last year’s operations of Groves, Inc., a financial vice president of the company believes that the firm’s total net income could be increased by $160,000 if its design division were discontinued. (Amounts are given in thousands of dollars.) Totals /All Other Divisions/ Design Division Sales. . . . . . . . . . . . . . . . . . . . . . $18,800 $14,400 $4,400 Cost of...

Mersey Company's industrial photofinishing division, Vale, incurred the following costs and expenses in the last period....

Mersey Company's industrial photofinishing division, Vale, incurred the following costs and expenses in the last period. Variable Fixed Direct materials $228,000 Direct labour 171,000 Factory overhead 79,800 $47,880 General, selling, and administrative 34,200 54,720 Totals $513,000 $102,600 During the period, Vale produced 342,000 units of industrial photo prints, which were sold for $2 each. Mersey's investment in Vale was $570,000 and $798,000 at the beginning and ending of the year, respectively. Mersey's weighted average cost of capital is 15%. Determine...

Consider the following information for Presidio Inc.'s most recent year of operations. Additional information for Presidio’s...

Consider the following information for Presidio Inc.'s most recent year of operations. Additional information for Presidio’s most recent year of operations follows: Number of units produced 2,900 Number of units sold 1,750 Unit sales price $ 680.00 Direct materials per unit 55.00 Direct labor per unit 85.00 Variable manufacturing overhead per unit 35.00 Fixed manufacturing overhead per unit ($343,360 ÷ 2,900 units) 118.40 Total variable selling expenses ($13 per unit sold) 22,750.00 Total fixed general and administrative expenses 79,000.00 Required:...

The South Division of Wiig Company reported the following data for the current year. Sales $2,950,000...

The South Division of Wiig Company reported the following data for the current year. Sales $2,950,000 Variable costs 1,947,000 Controllable fixed costs 605,000 Average operating assets 5,000,000 Top management is unhappy with the investment center’s return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 1. Increase sales by $300,000 with no change in...

The South Division of Bonita Company reported the following data for the current year. Sales $3,000,000...

The South Division of Bonita Company reported the following data for the current year. Sales $3,000,000 Variable costs 1,980,000 Controllable fixed costs 600,000 Average operating assets 5,000,000 Top management is unhappy with the investment center’s return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 1. Increase sales by $300,000 with no change in...

The following information regarding the operations for March of the Goodfield Products Company are available:

The following information regarding the operations for March of the Goodfield Products Company are available: (all monetary values are in Php)The book show these account balances as of March 1:Raw materials and suppliesP 65,000Work in process*292,621Finished goods78,830The work in process* account is supported by these job order cost sheets:Job. No.ItemDirect MaterialsDirect LaborFactory Overhead20480,000 balloonsP 15,230P 21,430P 13,8002055,000 life rafts40,45055,24022,37020610,000 life belts60,87543,86019,366TotalP116,555P120,530P 55,536During March, these transactions occurred:(a) Purchase of raw materials and supplies, P42,300.(b) Purchase of special materials for newJob No. 207,...

The Magnetic Imaging Division of Medical Diagnostics, Inc. has reported the following results for last year's operations:

Sales : $25 million Net operating income : $3 million Average operating income : $10 million Compute the Magnetic Imaging Division's ROI.

Question