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 asset turnover (AT) for Division Y is calculated to be (rounded):
A) 1.43.
B) 1.60.
C) 1.67.
D) 2.86.
E) 3.33.

Question

Quizplus · Accepted Answer

Asset Turnover (AT) is calculated as Sales divided by Investment in assets. For Division Y, AT = $900,000 / $540,000 = 1.67.

Consider the Following Data for Three Divisions of a Company