The Portland Division's operating data for the past two years is as follows: The Portland Division's margin in Year 2 was 150% of the margin for Year 1. The sales for Year 2 were:
A)$750, 000
B)$2, 000, 000
C)$3, 846, 154
D)$2, 400, 000

Question

The Portland Division's operating data for the past two years is as follows:  The Portland Division's margin in Year 2 was 150% of the margin for Year 1. The sales for Year 2 were:
A)$750, 000 
B)$2, 000, 000 
C)$3, 846, 154 
D)$2, 400, 000

Quizplus · Accepted Answer

Year 2 ROI = Year 2 Margin × Year 2 Turnover
24% = Year 2 Margin × 2
Year 2 Margin = 24% ÷ 2 = 12%
Year 2 Margin = Year 2 Net operating income ÷ Year 2 Sales
12% = $288, 000 ÷ Year 2 Sales
Year 2 Sales = $288, 000 ÷ 12% = $2, 400, 000

The Portland Division's Operating Data for the Past Two Years