The Millard Division's operating data for the past two years are provided below: Millard Division's margin in Year 2 was 150% of the margin in Year 1.
The sales for Year 2 were:
A) $1,200,000
B) $3,200,000
C) $3,000,000
D) $3,333,333

Question

The Millard Division's operating data for the past two years are provided below:  Millard Division's margin in Year 2 was 150% of the margin in Year 1.
The sales for Year 2 were:
A) $1,200,000 
B) $3,200,000 
C) $3,000,000 
D) $3,333,333

Quizplus · Accepted Answer

Year 2 ROI = Year 2 Margin × Year 2 Turnover
36% = Year 2 Margin × 3
Year 2 Margin = 36% ÷ 3 = 12%
Year 2 Margin = Year 2 Net operating income ÷ Year 2 Sales
12% = $360,000 ÷ Year 2 Sales
Year 2 Sales = $360,000 ÷ 12% = $3,000,000

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