Asked by Benoit BOUDA on Jul 30, 2024
Verified
Babak Industries is a division of a major corporation. Last year the division had total sales of $19,560,000, net operating income of $1,877,760, and average operating assets of $6,000,000.The division's margin is closest to:
A) 31.3%
B) 9.6%
C) 30.7%
D) 40.3%
Margin
The difference between the selling price of a product or service and its cost, often expressed as a percentage of the selling price.
Operating Assets
Assets used by a company in its day-to-day operations to generate revenue, excluding investments and non-operational assets.
- Attain familiarity with the notion of margin in investment options and organizational activities.
- Assess the performance of divisions in major corporations by utilizing indicators like margin, turnover, and residual income.
Verified Answer
RK
regina kaykovaJul 30, 2024
Final Answer :
B
Explanation :
Margin = Net Operating Income / Total Sales
Margin = $1,877,760 / $19,560,000
Margin = 0.096 or 9.6%
Margin = $1,877,760 / $19,560,000
Margin = 0.096 or 9.6%
Learning Objectives
- Attain familiarity with the notion of margin in investment options and organizational activities.
- Assess the performance of divisions in major corporations by utilizing indicators like margin, turnover, and residual income.