Selected operating data for two divisions of Outback Brewing, Ltd., of Australia

Question

Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Division New South Queensland Wales Sales Average operating assets Net operating income Property, plant, and equipment (net) $1,003,000 1,891,000 $590,000 610,000 $90,270 113,460 $ 242,000 192,000 Required: . Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and urnover 2. Which divisional manager seems to be doing the better job? Complete this question by entering your answers in the tabs below Required 1Required 2 Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover. (Round your answers to 2 decimal places.) Margin Turnover ROI Queensland division New South Wales division Required 1 Required 2>

Explanation / Answer

Margin =Net Operating Income / Sales *100

Turnover= Sales / Average Operating Assets

ROI = Margin*Turnover

For Queensland:

For New South Wales :

Hence the correct answer is :

Since the ROI is greater for the  New South Wales Division, the divisional manager of New South Wales is doing a better job.

1. Margin 6.00 2. Turnover 3.10 3. ROI 18.60

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