Sunshine Food Company Case: Divisional Income Statements and Rate of Return on Investment Analysis
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Sunshine Food Company is a diversified food company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 2014, are as follows:
|
Cereal Division |
Snack Cake Division |
Retail Bakeries Division |
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| Sales | $ 5,520,000 | $ 5,900,000 | $5,330,000 | |||
| Cost of goods sold | 3,370,000 | 3,660,000 | 3,140,000 | |||
| Operating expenses | 1,156,400 | 942,000 | 804,200 | |||
| Invested assets | 6,900,000 | 5,900,000 | 4,100,000 | |||
The management of Sunshine Food Company is evaluating each division as a basis for planning a future expansion of operations.
Required:
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1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges. |
