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Stells [14]
4 years ago
15

Low Carb Diet Supplement Inc. has two divisions. Division A has a profit of $150,000 on sales of $2,780,000. Division B is able

to make only $28,400 on sales of $307,000. a. Compute the profit margins (return on sales) for each division. (Input your answers as a percent rounded to 2 decimal places.) b. Based on the profit margins (returns on sales), which division is superior
Business
1 answer:
tigry1 [53]4 years ago
3 0

Answer:

(a) Profit margin for A = 5.40%, For division B =9.25% (b) Division B has a superior higher profit margin

Explanation:

Solution

Given that

Division A has a profit = 150,000

sales = $2,780,000

Division B  profit = $28,400

Sales =$307,000

Now

(a)We compute for the margin profit for each division which is giving below:

Profit margin=Profit/Sales

Profit margin for A=(150000/2,780,000)

=5.40%

Profit margin for B = (28400/307000)

=9.25%

(b The division B is superior having higher profit margin.

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Answer:

Results are below.

Explanation:

<u>Giving the following information:</u>

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<u>With the information listed above, we need to make an income statement following the structure below:</u>

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