Loose Leaf for Fundamental Accounting Principles
Loose Leaf for Fundamental Accounting Principles
23rd Edition
ISBN: 9781259687709
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 24, Problem 23E
To determine

Introduction:

Profit Margin: Profit margin is a profitability ratio which calculates the relation between net income and sales.

Investment Turnover: Asset or Investment turnover ratio measures the sales generated by a company relative to the value of its assets. It is used as an indicator of the efficiency with which a company is deploying its assets in generating revenue.

To Calculate:

Requirement 1: Profit Margin of each division

Expert Solution
Check Mark

Answer to Problem 23E

Solution:

Profit Margin of –

Professional Products = 20.32%

Consumer Products = 18.52%

Luxury Products = 17.55%

Active Cosmetics = 20.06%

Explanation of Solution

Professional Products

Profit Margin= Net IncomeSales x 100                       = 5522717 x100                       = 20.32%

Consumer Products

Profit Margin= Net IncomeSales x 100                       = 17659530 x100                       = 18.52%

Luxury Products

Profit Margin= Net IncomeSales x 100                       = 7914507 x100                       = 17.55%

Active Cosmetics

Profit Margin= Net IncomeSales x 100                       = 2781386 x100                       = 20.06%

Conclusion
Professional Products has the highest profit margin

To determine

Requirement 2: Investment Turnover of each division

Expert Solution
Check Mark

Explanation of Solution

Investment Turnover of –

Professional Products = 1.12

Consumer Products = 1.66

Luxury Products = 1.17

Active Cosmetics = 1.68

Professional Products

Investment Turnover = Net SalesAverage Assets                                    = 2717(2324+2516)/2                                     = 1.12

Consumer Products

Investment Turnover = Net SalesAverage Assets                                    = 9530(5994+5496)/2                                     = 1.66

Luxury Products

Investment Turnover = Net SalesAverage Assets                                    = 4507(3651+4059)/2                                     = 1.17

Active Cosmetics

Investment Turnover = Net SalesAverage Assets                                    = 1386(830+817)/2                                     = 1.68

Conclusion
Active Cosmetics has the best investment turnover

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Chapter 24 Solutions

Loose Leaf for Fundamental Accounting Principles

Ch. 24 - Prob. 11DQCh. 24 - Prob. 12DQCh. 24 - Prob. 13DQCh. 24 - Prob. 14DQCh. 24 - Prob. 15DQCh. 24 - Prob. 16DQCh. 24 - Prob. 17DQCh. 24 - Prob. 18DQCh. 24 - Prob. 19DQCh. 24 - Prob. 20DQCh. 24 - Allocation and measurement terms C1 In each blank...Ch. 24 - Basis for cost allocation C1 For each of the...Ch. 24 - Prob. 3QSCh. 24 - Prob. 4QSCh. 24 - Prob. 5QSCh. 24 - Prob. 6QSCh. 24 - Prob. 7QSCh. 24 - Prob. 8QSCh. 24 - Prob. 9QSCh. 24 - Prob. 10QSCh. 24 - Prob. 11QSCh. 24 - Prob. 12QSCh. 24 - Prob. 13QSCh. 24 - Prob. 14QSCh. 24 - Prob. 15QSCh. 24 - Prob. 16QSCh. 24 - Prob. 17QSCh. 24 - Prob. 18QSCh. 24 - Prob. 19QSCh. 24 - Prob. 20QSCh. 24 - Exercise 24-1 Responsibility accounting...Ch. 24 - Exercise 24-2 Responsibility accounting...Ch. 24 - Exercise 24-3 Service department expenses...Ch. 24 - Prob. 4ECh. 24 - Prob. 5ECh. 24 - Prob. 6ECh. 24 - Prob. 7ECh. 24 - Prob. 8ECh. 24 - Prob. 9ECh. 24 - Prob. 10ECh. 24 - Prob. 11ECh. 24 - Prob. 12ECh. 24 - Prob. 13ECh. 24 - Prob. 14ECh. 24 - Prob. 15ECh. 24 - Prob. 16ECh. 24 - Prob. 17ECh. 24 - Prob. 18ECh. 24 - Prob. 19ECh. 24 - Prob. 20ECh. 24 - Prob. 21ECh. 24 - Prob. 22ECh. 24 - Prob. 23ECh. 24 - Problem WA Responsibility according perfortmance...Ch. 24 - Prob. 2APSACh. 24 - Prob. 3APSACh. 24 - Problem 24-4A Departmental contribution to income...Ch. 24 - Prob. 5APSACh. 24 - Prob. 1BPSBCh. 24 - Prob. 2BPSBCh. 24 - Prob. 3BPSBCh. 24 - Prob. 4BPSBCh. 24 - Prob. 5BPSBCh. 24 - Prob. 24SPCh. 24 - Prob. 1BTNCh. 24 - Prob. 2BTNCh. 24 - Prob. 3BTNCh. 24 - Prob. 4BTNCh. 24 - Prob. 5BTNCh. 24 - Prob. 6BTNCh. 24 - Prob. 7BTNCh. 24 - Prob. 8BTNCh. 24 - Prob. 9BTN
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