La Mesa Stores has the following data for its two divisions for the year:
$\begin{array}{lcr}
&\text { Uno}&\text { Dos}\
\text { Revenues } & \$ 6,000,000 & \$ 18,000,000 \
\text { Cost of sales } & 3,769,500 & 9,400,000 \
\text { Allocated corporate overhead } & 400,000 & 1,200,000 \
\text { Other general \& administration } & 772,000 & 5,700,000 \
\text { Return } n \text { Tnrestment } & 14 \% & 12\%
\end{array}$
Required:
a. Compute divisional operating income for each of the divisions. Assume taxes are 35%.
b. Calculate the profit margin ratio for each division.
c. Calculate the asset turnover for each division.

Question

La Mesa Stores has the following data for its two divisions for the year:
 $\begin{array}{lcr}
&\text { Uno}&\text { Dos}\
\text { Revenues } & \$ 6,000,000 & \$ 18,000,000 \
\text { Cost of sales } & 3,769,500 & 9,400,000 \
\text { Allocated corporate overhead } & 400,000 & 1,200,000 \
\text { Other general \& administration } & 772,000 & 5,700,000 \
\text { Return } n \text { Tnrestment } & 14 \% & 12\%
\end{array}$ 
Required:
a. Compute divisional operating income for each of the divisions. Assume taxes are 35%.
b. Calculate the profit margin ratio for each division.
c. Calculate the asset turnover for each division.

Quizplus · Accepted Answer

The Answer of La Mesa Stores has the following data for its two divisions for the year:
 $\begin{array}{lcr}
&\text { Uno}&\text { Dos}\
\text { Revenues } & \$ 6,000,000 & \$ 18,000,000 \
\text { Cost of sales } & 3,769,500 & 9,400,000 \
\text { Allocated corporate overhead } & 400,000 & 1,200,000 \
\text { Other general \& administration } & 772,000 & 5,700,000 \
\text { Return } n \text { Tnrestment } & 14 \% & 12\%
\end{array}$ 
Required:
a. Compute divisional operating income for each of the divisions. Assume taxes are 35%.
b. Calculate the profit margin ratio for each division.
c. Calculate the asset turnover for each division.

La Mesa Stores Has the Following Data for Its Two