The following information relates to last year's operations at the Paper Division of Germane Corporation: What was the Paper Division's net operating income last year?
A)$24,300
B)$29,160
C)$145,800
D)$162,000

Question

The following information relates to last year's operations at the Paper Division of Germane Corporation:  What was the Paper Division's net operating income last year?
A)$24,300 
B)$29,160 
C)$145,800 
D)$162,000

Quizplus · Accepted Answer

ROI = Margin × Turnover
18% = Margin × 5
Margin = 18% ÷ 5 = 3.6%
Margin = Net operating income ÷ Sales
3.6% = Net operating income ÷ $810,000
Net operating income = 3.6% × $810,000 = $29,160

The Following Information Relates to Last Year's Operations at the Paper