The Maxim Corporation reported the following operating results for its three divisions: South,West,and East. $$\begin{array} { | l | r | r | r | }
\hline & \begin{array} { r }
\text { South } \
\text { Division }
\end{array} & \begin{array} { r }
\text { West } \
\text { Division }
\end{array} & \begin{array} { r }
\text { East } \
\text { Division }
\end{array} \
\hline \text { Sales } & \$ 380,000 & \$ 1,700,000 & \$ 2,000,000 \
\hline \begin{array} { l }
\text { Operating } \
\text { profits }
\end{array} & \$ 20,000 & \$ 50,000 & \$ 100,000 \
\hline \begin{array} { l }
\text { Dwisional } \
\text { assets }
\end{array} & \$ 200,000 & \$ 625,000 & \$ 800,000 \
\hline
\end{array}$$Which division's profit margin is the highest?
A) South.
B) West.
C) East.
D) All three divisions are the same.

Question

The Maxim Corporation reported the following operating results for its three divisions: South,West,and East. $$\begin{array} { | l | r | r | r | } 
\hline & \begin{array} { r } 
\text { South } \
\text { Division }
\end{array} & \begin{array} { r } 
\text { West } \
\text { Division }
\end{array} & \begin{array} { r } 
\text { East } \
\text { Division }
\end{array} \
\hline \text { Sales } & \$ 380,000 & \$ 1,700,000 & \$ 2,000,000 \
\hline \begin{array} { l } 
\text { Operating } \
\text { profits }
\end{array} & \$ 20,000 & \$ 50,000 & \$ 100,000 \
\hline \begin{array} { l } 
\text { Dwisional } \
\text { assets }
\end{array} & \$ 200,000 & \$ 625,000 & \$ 800,000 \
\hline
\end{array}$$Which division's profit margin is the highest?
A) South.
B) West.
C) East.
D) All three divisions are the same.

Quizplus · Accepted Answer

The profit margin is calculated as (Operating Profits / Sales) * 100. For South, it is (20,000 / 380,000) * 100 = 5.26%. For West, it is (50,000 / 1,700,000) * 100 = 2.94%. For East, it is (100,000 / 2,000,000) * 100 = 5%. South has the highest profit margin.

The Maxim Corporation Reported the Following Operating Results for Its