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 Sales Average operating assets Net operating income Property, plant, and equipment (net) Queensland Wales $1,375,000 $2,222,000 S 550,000 S505,000 S 96,250 88,880 S 255,000 205,000 Required: 1. Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and tumover. (Round your Turnover answers to 2 decimal places. Round your Margin and ROl percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).) Margin Turnover ROI Queensland division New South Wales division 2. Which divisional manager seems to be doing the better job? O Queensland division New South Wales division

Explanation / Answer

Margin= Net operating Income/sales*100 Turnover= Sales/Net operating assets Margin Turnover ROI Queenland Division 7.00 2.50 17.50 % 96250/1375000*100 1375000/550000 New South Wales division 4.00 4.4 17.58 % 88800/2222000 2222000/505000 ans 2 New south wales division as it has higher ROI

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