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Compute the rate of return for each division using the ROI

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Reference no: EM132521400

Selected operating data on the two divisions of Prism Company are given below:

Division                                  Eastern                      Western

Sales                                 $800,000                  $1,850,000

Average operating assets           $300,000               $400,000

Operating income                      $70,000                  $115,000

Plant and equipment                   $125,000                $200,000

Required:

Question 1. Compute the rate of return for each division using the ROI formula stated in terms of margin and turnover. (Do not round intermediate calculations. Round your answers to 1 decimal place.)

Eastern Division ___%

Western Division___%

Question 2. Which divisional manager seems to be doing the better job?

Reference no: EM132521400

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