The Calculating Fashion Company has two operating divisions: North and South. The following information was collected from its financial statements.
$$\begin{array} { l r r }
& \text { North } & { \text { South } } \
\text { Operating income } & \$ 15,375 & \$ 9,160 \
\text { Sales } & 90,100 & 128,445 \
\text { Average operating assets } & 47,620 & 37,690
\end{array}$$
Required:
The South Division has a goal to increase its ROI to 30% by the end of next year. Compute the increase (decrease) required in each of the following items in order to achieve this goal.
a. Operating assets
b. Total costs
c. Sales

Question

The Calculating Fashion Company has two operating divisions: North and South. The following information was collected from its financial statements.
 $$\begin{array} { l r r } 
& \text { North } & { \text { South } } \
\text { Operating income } & \$ 15,375 & \$ 9,160 \
\text { Sales } & 90,100 & 128,445 \
\text { Average operating assets } & 47,620 & 37,690
\end{array}$$ 
Required:
The South Division has a goal to increase its ROI to 30% by the end of next year. Compute the increase (decrease) required in each of the following items in order to achieve this goal.
a. Operating assets
b. Total costs
c. Sales

Quizplus · Accepted Answer

The Answer of The Calculating Fashion Company has two operating divisions: North and South. The following information was collected from its financial statements.
 $$\begin{array} { l r r } 
& \text { North } & { \text { South } } \
\text { Operating income } & \$ 15,375 & \$ 9,160 \
\text { Sales } & 90,100 & 128,445 \
\text { Average operating assets } & 47,620 & 37,690
\end{array}$$ 
Required:
The South Division has a goal to increase its ROI to 30% by the end of next year. Compute the increase (decrease) required in each of the following items in order to achieve this goal.
a. Operating assets
b. Total costs
c. Sales

The Calculating Fashion Company Has Two Operating Divisions: North and South