La Mesa Stores Has the Following Data for Its Two

question 78

Essay

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.

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