Seaside Enterprises has the following data for its three divisions for the year: SB TH GM Revenues$1,200,000 $3,800,000 $2,800,000 Cost of sales 769,500 1,900,000 1,400,000 Allocated corporate overhead 72,000 228,000 210,000 Other general & administration 158,500 1,100,000 1,100,000 Required:a. Compute divisional operating income for each of the divisions. Assume taxes are 30%.b. Calculate the gross margin ratio for each division.c. Calculate the operating margin ratio for each division.d. Calculate the profit margin ratio for each division.
What will be an ideal response?
a.
b. SB: $430,500/$1,200,000 = 35.88%; TH: $1,900,000/$3,800,000 = 50%; GM: $1,400,000/$2,800,000 = 50%
c. SB: $200,000/$1,200,000 = 16.67%; TH: $572,000/$3,800,000 = 15.05%; GM: $90,000/$2,800,000 = 3.21%
d. SB: $140,000/$1,200,000 = 11.67%; TH: $400,400/$3,800,000 = 10.54%; GM: $63,000/$2,800,000 = 2.25%
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