Home/ Questions/Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: E...
Next
Answered
tmntuto
  • 7
Asked: 2022-04-13T05:56:56+00:00 In:

Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: E…

  • 7

. Advertisement .

..3..

. Advertisement .

..4..

......... ADVERTISEMENT .........

..8..

Selected%20operating%20data%20for%20two%20divisions%20of%20Outback%20Brewing,%20Ltd.,%20of%20Australia%20are%20given%20below:%20E...

Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below.
Required:
1. Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover.
2. Which divisional manager seems to be doing the better job? 
♦ Relevant knowledge
Return on investment, also known by the term ROI, is a percentage of a financial profit or loss. The ratio is calculated as an investment, where the growth or decrease in value is represented in percentage
datainvestmentturnover
Share

1 Answer

  1. Best Answer

    Answer:

    Margin Turnover ROI
    Queensland Division 8% 3.3 26.4%
    New South Wales Division 6.5% 5.2 33.8%

    Explanation:

    That is what we know.

    ROI = Margin * Turnover

    Where,

    Margin = Net Operating Income / Sales

    Turnover = Sales / Average Operating Assets

    1.

    Queensland Division

    Margin = $166320 / $2079,000 = 0.08 or 8%

    Turnover = $2.079,000 / $630,000 = 3.3

    ROI = 8% * 3.3 = 26.4%

    2.

    New South Wales Division

    Margin = $209 560 / $3224,000 = 0.065 or 6.5%

    Turnover = $3224,000 / $620,000 = 5.2

    ROI = 6.5% *5.2 = 33.8%

    • 15

Leave an answer

You must login to add an answer.

Need An Account,