Question

Kragle Corporation reported the following financial data for one of its divisions for the year; average invested assets of $470,000; sales of $930,000; and income of $105,000. The investment center profit margin is:

a) 22.3%

b)50.5%

c)197.9%

d)447.6%

e) 11.3%

Answer 1

Answer:

e) 11.3%

Explanation:

Profit margin: Profit margin on sales can be defined as the proportion of earning or income or profit made by the company for each dollar of sales. It is always expressed in percentage (%).Assets: It can be defined as the resources owned by the organization which is capable of providing some future benefits. On the basis of duration of time assets are of two types which are Current Assets and Non-current Assets.  Sales: Sale of any goods or services can be made on a cash or credit basis. The amount receivable on sale can either be received immediately in cash or such a payment can be received at some future date.  Operating income: It refers to the income from business operations. It is calculated by deducting the fixed cost from contribution margin.