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14-03Pr_5e_s

# Survey of Accounting (Available Titles Cengagenow)

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Problem 14-3 Name: Section: Score: 0% Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. A red asterisk (*) will appear in the row immediately to the right of an incorrect answer. 1. SUNSHINE BAKING COMPANY Divisional Income Statements For the Year Ended June 30, 2010 Sales Cost of goods sold Gross Profit Operating expenses Income from operations 2. Rate of return on = Profit margin x Investment turnover investment (ROI) Rate of return on = Income from operations x Sales investment (ROI) Sales Invested Assets Bread Division: ROI = x = Snack Cake Division: ROI = x = Retail Bakeries Division: ROI = x = 3. Instructions Bread Division Snack Cake Division Retail Bakeries Division

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Problem 14-3 Name: SOLUTION Section: Score: See student sheet for student's score Scoring: ON Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. A red asterisk (*) will appear in the row immediately to the right of an incorrect answer.
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Unformatted text preview: 1. SUNSHINE BAKING COMPANY Divisional Income Statements For the Year Ended June 30, 2010 Sales \$8,100,000 \$8,700,000 \$7,800,000 Cost of goods sold 4,980,000 5,400,000 4,600,000 Gross Profit \$3,120,000 \$3,300,000 \$3,200,000 Operating expenses 1,662,000 1,995,000 1,484,000 Income from operations \$1,458,000 \$1,305,000 \$1,716,000 2. Rate of return on = Profit margin x Investment turnover investment (ROI) Rate of return on = Income from operations x Sales investment (ROI) Sales Invested Assets Bread Division: ROI = \$1,458,000 x \$8,100,000 = 13.50% \$8,100,000 \$10,800,000 Snack Cake Division: ROI = \$1,305,000 x \$8,700,000 = 12.00% \$8,700,000 \$10,875,000 Retail Bakeries Division: ROI = \$1,716,000 x \$7,800,000 = 28.60% \$7,800,000 \$6,000,000 3. Per dol ar of invested assets, the Retail Bakeries Division is the most profitable and should be expanded. Instructions Bread Division Snack Cake Division Retail Bakeries Division...
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