Solution-Compare the margin and asset turnover for three

Compare the margin and asset turnover for three divisions

Reference no: EM133154964

Question - Return on investment - After seeing the results of the segment analysis for the Nylon Fibers division, James Cameron wants all three divisions focusing on the correct avenues for improving division performance. Refer to the table below and answer the following questions.

	Polyesters Fibers Division	Rope Division	Nylon Fibers division	Total
Revenue	$10,600,000	$6,725,000	$8,650,000	$2,5975;000
Less variable cost
Cost of goods sold	5,543,000,	2,368,000	4,414,000	12,325,000
Selling and administrative	1334000	649000	890000	2873000
Contribution margin	3723000	3708000	3346000	10777000
Less traceable fixed expenses
Cost of goods sold	1685000	1382000	2208000	5275000
Selling and administrative	236000	174000	273000	683000
Segment margin	1802000	2152000	865000	4819000
Common fixed expenses				2886000
Net operating income				1933000

Required -

a. Calculate the margin and asset turnover for Centex Yarns' three divisions. Show that margin × asset turnover equals the return on investment for each division as reported in the text.

b. Compare the margin and asset turnover for the three divisions and make suggestions for increasing the return on investment of each division.

Reference no: EM133154964

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Compare the margin and asset turnover for three divisions

Reference no: EM133154964

Reference no: EM133154964

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