Question

12 Polese Practice problems (Managerial) 0 Cor Business Email - Office Depot HD Supply Saved Required: Fill in the blanks (Round "Return on sales". "Asset turnover" and "Return on investment" answers to 2 decimal places. Division $ $ $ ook 1,500,000 150,000 600,000 750,000 750,000 75,000 Sales Operating income Investment (assets) Return on sales Asset turnover Return on investment ol 2,500,000 Prev 1 of 4 Score answer >

Answer 1

Department X

Return on sales = Operating Income / Sales = 150,000 / 1,500,000 = 10%

Asset turnover = Sales / Investment(Assets) = 600,000 / 1,500,000 = 2.5 times

Return on Investment = Operating income / Investment = 150,000 / 600,000 = 25%

Department Y

investment = Operating income / Return on Investment = 75,000 / 1% = 7,500,000

Return on sales = Operating Income / Sales = 75,000 / 750,000 = 10%

Asset turnover = Sales / Investment(Assets) = 750,000 / 7,500,000 = 0.1 times

Department Z

Sales = Investment x Asset turnover = 2,500,000 x 1.5 = 3,750,000

Operating Income = Sales x return on sales = 3,750,000 x 0.5% = 18,750

Return on Investment = Operating income / Investment = 18,750 / 2,500,000 = 0.75%

Sales operating income Investment (assets) Return on sales Asset turnover Return on Investment X $ 1,500,000.00 $ 150,000.00 $ 600,000.00 10% 2.5 25% DIVISIONS Y Z $ 750,000.00 $3,750,000.00 $ 75,000.00 $ 18,750.00 $ 7,500,000.00 $ 2,500,000.00 10% 1 0.50% 0.1 1.5 1% 0.75%