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) $2,275,000 $2,781,000 650,000 $ 515,000 $232,050 200,232 $265,000 $ 215,000 Required: 1. Compute the rate of return for each division using the return on investment (ROl) formula stated in terms of margin and turnover. (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

Explanation / Answer

Margin Turnover ROI Queensland division $232,050/$2,275,000 = 10.20% $2,275,000/$650,000 = 3.5 3.5*10.20% = 35.70% New South Wales Division $200,232/$2,781,000 = 7.20% $2,781,000/$515,000 = 5.4 5.4*7.20% = 38.88%

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