The document provides selected operating data for two divisions of Outback Brewing Ltd. in Australia. It includes the margin, turnover, and ROI calculations for the Queensland and New South Wales divisions. The ROI for the New South Wales division is higher at 12% compared to 10.2% for the Queensland division, indicating that the New South Wales divisional manager is performing better.
Selected operating data for two divisions of Outback Brewing- Ltd-- of.docx
1. Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given
below:
Division
Compute the rate of return for each division using the return on investment (ROI) formula stated
in terms of margin and turnover. (Round your answers to 2 decimal places.)
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given
below:
Margin Turnover ROI Queensland division 0 0 New South Wales division 0 0
Solution
Solution -
Return on investment AKA ROI) is a measurement of performance which shows the returns on
the average operating assets.
Formula to Calculate ROI = Margin X TurnOver  ( Note Margin in % and Turn Over in
Ratio )
Where Margin = Net operating income / Sales  & TurnOver = Sales / Average operating
assets
Below is the Calculation
1)
2) Divisional manager of New South Wales is doing the better job as the ROI is greater for New
South Wales
2. Queensland New South Wales
A Sales 9,01,000 24,80,000
B Average operating assets 5,30,000 6,20,000
C Net operating income 54,060 74,400
D Property, plant, and equipment (net) 2,48,000 1,98,000
M Margin % (C/A) 6.00% 3.00%
T Turnover (A/B) 1.7 4
ROI Return on investment 10.20% 12.00%