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Hinsdale Company has the following data for this year:

Please answer the following problem.

Bottling Division Mixing Division
Average operating assets $320,000 $ 800,000
Contribution margin 160,000 500,000
Operating income 80,000 120,000
Sales 400,000 1,200,000
Weighted-average cost of capital 18% 18%


Hinsdale Company has a target ROI of 18 percent.

Required: find out the following amounts for each division:
a. Return on sales ratio
b. Operating investment turnover
c. ROI
d. Residual income

 

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M946194

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