Sunland Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Eachdistribution channel is evaluated as an investment center. Selected results from the latest year are as follows:Sales revenueVariable expensesDirect fixed expensesAverage assetsRequired rate of returnRetail Stores$9,758,8003,935,0004,750,3327,870,00012%Internet$3,570,0001,360,000930,1553,570,00012%Catalog Sales$3,870,0001,820,0001,829,4101,935,00012% (a1)Calculate the margin and asset turnover for each of the three distribution channels. (Round answers to 2 decimal places, e.g. 5.12%or 5.12.)MarginAsset turnovereTextbook and MediaSave for Later(a2)Retail StoresROISave for LaterRetail StoreseTextbook and Media%Calculate the ROI for each of the three distribution channels. (Round answers to 2 decimal places, e.g. 5.12%.)%InternetInternet%%Catalog SalesAttempts: 0 of 3 usedCatalog Sales%%Submit AnswerAttempts: 0 of 3 used Submit Answer

Net operating income :— It is the difference between sales revenue and operating expenses. Margin…

Sunland Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Sales revenue Variable expenses Direct fixed expenses Average assets Required rate of return Retail Stores $9,758,800 3,935,000 4,750,332 7,870,000 12% Internet Catalog Sales $3,570,000 1,360,000 930,155 3,570,000 12% $3,870,000 1,820,000 1,829,410 1,935,000 12%

Sunland Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Sales revenue Variable expenses Direct fixed expenses Average assets Required rate of return Retail Stores $9,758,800 3,935,000 4,750,332 7,870,000 12% Internet Catalog Sales $3,570,000 1,360,000 930,155 3,570,000 12% $3,870,000 1,820,000 1,829,410 1,935,000 12%

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 37P

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Please send answer in chart set up Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income AverageInvested Assets Electronics $ 39,840,000 $ 2,988,000 $ 16,600,000 Sporting goods 25,200,000 2,142,000 12,600,000 1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company?2. Assume a target income level of 11% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company?3. Assume the Electronics department is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted?
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Please send answer in chart format Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center). Investment Center Sales Income AverageInvested Assets Electronics $ 39,840,000 $ 2,988,000 $ 16,600,000 Sporting goods 25,200,000 2,142,000 12,600,000 Compute profit margin and investment turnover for each department. Which department generates the most net income per dollar of sales? Which department is most efficient at generating sales from average invested assets?
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