ADMS 2510 Lecture Notes - Lecture 11: The Motor, Rogue Trooper, Variable Cost

• School: York University
• Department: Administrative Studies
• Course: ADMS 2510
• Professor: Roberto Umana

Document Summary

6. 22% 4. 63 = 28. 8: the manager of the western division seems to be doing the better job. Although her margin is about 2. 5 percentage points lower than the mar- gin of the eastern division, her turnover is higher (a turnover of 4. 63, as compared to a turnover of 2. 67 for the eastern division). The greater turnover more than offsets the lower margin, resulting in a 28. 7% roi, as compared to a 23. 3% roi for the other division. Notice that if you look at margin alone, then the eastern division ap- pears to be the strongest division. This fact underscores the importance of looking at turnover as well as at margin in evaluating performance in an investment center. Problem 11-21 (45 minutes: the segmented income statement follows: ** sh. 50 per square metre 8,000 square metres, 14,000 square metres, and 2,000 square metres respectively. No, the wheat cereal should not be eliminated.