Discuss operating investment turnover

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Reference no: EM131773418

Willow brook Company has the following data for this year:

 

Bottling Division

Mixing Division

Average operating assets

$320,000

$ 800,000

Contribution margin

160,000

500,000

Operating income

80,000

120,000

Sales

500,000

1,300,000

Weighted-average cost of capital

17%

17%

Willow brook Company has a target ROI of 17 percent.

Required: Calculate the following amounts for each division:

a. Return on sales ratio

b. Operating investment turnover

c. ROI

d. Residual income

Reference no: EM131773418

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