ABC Company operates two divisions with the following operating Information for the month of May. Division 1: sales, $148,000; operating Income, $49,580; operating assets, $370,000. Division 2: sales, $94,000; operating Income, $48,316; operating assets, $470,000. ABC Company expects a minimum return of 10% should be earned from all Investments. Required: a. Prepare ABC Company's ROI analysis using the DuPont model for each division. b. Calculate each division's residual income.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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ABC Company operates two divisions with the following operating Information for the month of May.
Division 1: sales, $148,000; operating Income, $49,580; operating assets, $370,000.
Division 2: sales, $94,000; operating Income, $48,316; operating assets, $470,000.
ABC Company expects a minimum return of 10% should be earned from all investments.
Required:
a. Prepare ABC Company's ROI analysis using the DuPont model for each division.
b. Calculate each division's residual income.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Prepare ABC Company's ROI analysis using the DuPont model for each division.
Note: Do not round intermediate calculations. Round Turnover answers to one decimal place. Round Margin and ROI answers
to the nearest whole percentage.
DuPont Performance Analysis:
Revenues
Operating Income
Operating Assets
Margin
Turnover
ROI
Division 1
%6
turns
96
Division 2
%
turns
96
Transcribed Image Text:ABC Company operates two divisions with the following operating Information for the month of May. Division 1: sales, $148,000; operating Income, $49,580; operating assets, $370,000. Division 2: sales, $94,000; operating Income, $48,316; operating assets, $470,000. ABC Company expects a minimum return of 10% should be earned from all investments. Required: a. Prepare ABC Company's ROI analysis using the DuPont model for each division. b. Calculate each division's residual income. Complete this question by entering your answers in the tabs below. Required A Required B Prepare ABC Company's ROI analysis using the DuPont model for each division. Note: Do not round intermediate calculations. Round Turnover answers to one decimal place. Round Margin and ROI answers to the nearest whole percentage. DuPont Performance Analysis: Revenues Operating Income Operating Assets Margin Turnover ROI Division 1 %6 turns 96 Division 2 % turns 96
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