Divisional performance analysis and evaluation The vice president of operations of Free Ride Bike Company is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year for each division are as follows: Line Item Description Road Bike Division Mountain Bike Division Sales $3,080,000 $3,220,000 Cost of goods sold 1,355,000 1,513,000 Operating expenses 1,170,600 1,224,000 Invested assets 2,800,000 2,300,000 Required: Question Content Area 1.  Prepare condensed divisional income statements for the year ended December 31, 20Y7, assuming that there were no support department allocations. Free Ride Bike CompanyDivisional Income StatementsFor the Year Ended December 31, 20Y7 Line Item Description Road Bike Division Mountain Bike Division Sales $Sales $Sales Cost of goods sold Cost of goods sold Cost of goods sold Gross profit $Gross profit $Gross profit Operating expenses Operating expenses Operating expenses Operating income $Operating income $Operating income   Feedback Area   Feedback   1. For each division, subtract operating expenses from gross profit. Question Content Area 2.  Using the DuPont formula for return on investment, determine the profit margin, investment turnover, and return on investment for each division. If required, round your answers to one decimal place. Division Profit Margin Investment Turnover ROI Road Bike Division fill in the blank 1 of 6% fill in the blank 2 of 6 fill in the blank 3 of 6% Mountain Bike Division fill in the blank 4 of 6% fill in the blank 5 of 6 fill in the blank 6 of 6% 3.  If management desires a minimum acceptable rate of return of 16%, determine the residual income for each division. Division Residual Income Road Bike Division fill in the blank 1 of 2$ Mountain Bike Division fill in the blank 2 of

Return on investment The operating income and the amount of invested assets in each division of Conley Industries are as follows:   Operating Income Invested Assets Retail Division $9,600,000   $40,000,000   Commercial Division 12,100,000   55,000,000   Internet Division 6,480,000   36,000,000     a.  Compute the return on investment for each division. Division Percent Retail Division fill in the blank 1 % Commercial Division fill in the blank 2 % Internet Division fill in the blank 3 % b.  Which division is the most profitable per dollar invested?

Operating income for profit center The centralized Data Analytics Department of Drewlink Company has expenses of $340,000. The department has provided a total of 8,000 hours of service for the period. The Retail Division has used 2,000 hours of data analytics service during the period, and the Commercial Division has used 6,000 hours of data analytics service. Additional data for the two divisions is following below: Retail Division Commercial Division Sales Cost of goods sold $2,550,000 1,450,000 $1,700,000 -750,000 230,000 170,000 Selling expenses Determine the divisional operating income for the Retail Division and the Commercial Division. Do not round interim calculations. Drewlink Company Divisional Operating income Line Item Description Retail Division Commercial Division Sales Cost of goods sold Support department allocations X Operating income Feedback

ROI and Investment Decisions Jarriot, Inc., presented two years of data for its Furniture Division and its Houseware Division. Furniture Division:             Year 1 Year 2 Sales $35,300,000 $38,300,000 Operating income 1,380,000 1,560,000 Average operating assets 8,110,000 8,110,000   Houseware Division:             Year 1 Year 2 Sales $11,700,000 $12,800,000 Operating income 670,000 550,000 Average operating assets 5,800,000 5,800,000   At the end of Year 2, the manager of the Houseware Division is concerned about the division’s performance. As a result, he is considering the opportunity to invest in two independent projects. The first is called the Espresso-Pro; it is an in-home espresso maker that can brew regular coffee as well as make espresso and latte drinks. While the market for espresso drinkers is small initially, he believes this market can grow, especially around gift-giving occasions. The second is the Mini-Prep appliance that can be used to do…

Calculate return on investment (ROI) for each division using operating income as a measure of income and total assets as a measure of investment.

Return on investment The operating income and the amount of invested assets in each division of Conley Industries are as follows: Operating Income Invested Assets Retail Division $72,600 $330,000 Commercial Division 117,600 490,000 Internet Division 224,100 830,000 a. Compute the return on investment for each division. (Round to the nearest whole percentage.) Division Percent Retail Division % Commercial Division % Internet Division b. Which division is the most profitable per dollar invested?

Return on Investment The operating income and the amount of invested assets in each division of Otte Industries are as follows:   Operating Income   Invested Assets Retail Division $176,400                 $840,000            Commercial Division 134,400                 560,000            Internet Division 167,500                 670,000            a.  Compute the return on investment for each division. Division Percent   Retail Division:   % Commercial Division:   % Internet Division:   % b.  Which division is the most profitable per dollar invested?

Divisional Income Statements and Return on Investment Analysis The Crunchy Granola Company is a diversified food company that specializes in all natural foods. The company has three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y7, are as follows:   CerealDivision Snack CakeDivision RetailBakeries Division Sales $25,000,000   $8,000,000   $9,750,000        Cost of goods sold 16,670,000   5,575,000   6,795,000        Operating expenses 7,330,000   1,945,000   2,272,500        Invested assets 10,000,000   4,000,000   6,500,000        The management of The Crunchy Granola Company is evaluating each division as a basis for planning a future expansion of operations. Required:  Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. The…

The vice president of operations of Scott Hall and Associates is evaluating the performance of two divisions organized as investment centers. Invested assets and condensed income statement data for the past year for each division are as follows: Category Road Bike Division Mountain Bike Division Sales $1,750,000 $1,810,000 Cost of goods sold 1,300,000 1,440,000 Operating expenses 202,000 236,800 Invested assets 1,400,000 800,000     Prepare condensed divisional income statements for the year ended December 31, 2021, assuming that there were no service department charges.  Using the DuPont formula for return on investment, determine the profit margin percentage, investment turnover, and return on investment for each division. (Round percentages and the investment turnover to two places behind the decimal.)  If management’s minimum acceptable return on investment is 10%, determine the residual income for each division.  In your own words…

Evaluating Investment Centers Terry Enterprises, Inc. has two divisions-the Foods division and the Clothes division. Historically, Terry has used the division's ROI as the performance measure for the bonus determinations. Terry Foods division has gross total assets of $1,000,000, accumulated depreciation of $350,000, current liabilities of $250,000, and sales of $2,000,000. Foods' operating income is $320,000. Terry Clothes division has gross total assets of $5,000,000, accumulated depreciation of $2,100,000, current liabilities of $1,500,000, and sales of $8,000,000. Clothes' operating income is $870,000. Use the DuPont formula to compute ROI for each division and for Terry Enterprises as a whole. Use operating income and gross total assets as the measures of income and investment. Round answers to the nearest whole percentage. ROI Foods Clothes Terry Enterprises % % %