Consider the following data for three divisions of a company, X, Y, and Z:
$\begin{array}{lrrr}
\text { Divisional: } & \text { X } & \text { Y } & \text { Z } \
\text { Sales } & \$ 1,800,000 & \$ 900,000 & \$ 4,800,000 \
\text { Operating Income } & 252,000 & 108,000 & 240,000 \
\text { Investment in assets } & 630,000 & 540,000 & 3,000,000
\end{array}$The return on sales (ROS) for Division Y is:
A) 5.0%.
B) 8.0%.
C) 12.0%.
D) 14.0%.
E) 20.0%.

Question

Quizplus · Accepted Answer

Return on Sales (ROS) is calculated as Operating Income divided by Sales. For Division Y, ROS = $ \frac{108,000}{900,000} = 0.12 $ or 12%.

Consider the Following Data for Three Divisions of a Company