{"id":234765,"date":"2025-06-14T12:41:25","date_gmt":"2025-06-14T12:41:25","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=234765"},"modified":"2025-06-14T12:41:27","modified_gmt":"2025-06-14T12:41:27","slug":"a-companys-two-divisions-report-the-information-below","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/06\/14\/a-companys-two-divisions-report-the-information-below\/","title":{"rendered":"A company’s two divisions report the Information below."},"content":{"rendered":"\n

A company’s two divisions report the Information below. Electronics Sporting Goods Sales
40,000 Income 5,670 4,100 Average assets 40,500 25,000 Enter answers in the tabs below. Required 1 Required 2 Required 3 Calculate profit margin for each division. Division Electronics Sporting Goods Numerator: Profit margin Denominator: = Profit margin = Required 1 Required 2 ><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n

.<\/p>\n\n\n\n

Completed Table:<\/strong><\/p>\n\n\n\n

Here is the table with the correct values filled in for the calculation of the profit margin for each division.<\/p>\n\n\n\n

Division<\/td><\/td>Numerator:<\/td>\/<\/td>Denominator:<\/td>=<\/td>Profit margin<\/td><\/tr>
Electronics<\/strong><\/td><\/td>$ 5,670<\/td>\/<\/td>$ 81,000<\/td>=<\/td>7.0%<\/td><\/tr>
Sporting Goods<\/strong><\/td><\/td>$ 4,100<\/td>\/<\/td>$ 40,000<\/td>=<\/td>10.25%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
\n\n\n\n

Explanation of Calculation<\/strong><\/h3>\n\n\n\n

To determine the profit margin for each division, a standard financial formula is used. Profit margin is a measure of profitability, calculated by dividing a division’s income by its total sales. This ratio demonstrates how much profit the company makes for every dollar of sales generated by that division. A higher percentage indicates greater profitability. The ‘Average assets’ figure is not required for this specific calculation.<\/p>\n\n\n\n

Electronics Division Calculation:<\/strong>
The calculation begins by identifying the correct figures from the provided data.
100 and sales are $40,000. Following the same formula, the income is the numerator and sales is the denominator.<\/p>\n\n\n\n

The calculation is:
$4,100 (Income) \u00f7 $40,000 (Sales) = 0.1025<\/p>\n\n\n\n

This result of 0.1025, or 10.25%, means that the Sporting Goods division earns 10.25 cents in profit for each dollar of sales revenue.<\/p>\n\n\n\n

By comparing the two divisions, it is clear that the Sporting Goods division has a higher profit margin. This suggests it is more profitable on a per-dollar-of-sales basis than the Electronics division. The “Average assets” figures of $40,500 for Electronics and $25,000 for Sporting Goods are not required for this specific calculation, as they are used for other performance metrics like return on investment (ROI).* Numerator:<\/strong> The income for the Electronics division is $5,670.<\/p>\n\n\n\n

    \n
  • Denominator:<\/strong>\u00a0The sales for the Electronics division are $81,000.<\/li>\n<\/ul>\n\n\n\n

    The formula is applied as follows:
    Profit Margin = Income \/ Sales
    Profit Margin = $5,670 \/ $81,000 = 0.07<\/p>\n\n\n\n

    To express this result as a percentage, the decimal is multiplied by 100.
    0.07 * 100 = 7.0%
    Thus, the profit margin for the Electronics division is 7.0%. This signifies that the division earns 7 cents of profit for every dollar of sales.<\/p>\n\n\n\n

    Sporting Goods Division Calculation:<\/strong>
    The same procedure is followed for the Sporting Goods division.<\/p>\n\n\n\n

      \n
    • Numerator:<\/strong>\u00a0The income for the Sporting Goods division is $4,100.<\/li>\n\n\n\n
    • Denominator:<\/strong>\u00a0The sales for the Sporting Goods division are $40,000.<\/li>\n<\/ul>\n\n\n\n

      The formula is applied as follows:
      Profit Margin = Income \/ Sales
      Profit Margin = $4,100 \/ $40,000 = 0.1025<\/p>\n\n\n\n

      To convert this decimal into a percentage, it is multiplied by 100.
      0.1025 * 1<\/p>\n\n\n\n

      \"\"<\/figure>\n","protected":false},"excerpt":{"rendered":"

      A company’s two divisions report the Information below. Electronics Sporting Goods Sales40,000 Income 5,670 4,100 Average assets 40,500 25,000 Enter answers in the tabs below. Required 1 Required 2 Required 3 Calculate profit margin for each division. Division Electronics Sporting Goods Numerator: Profit margin Denominator: = Profit margin = Required 1 Required 2 > The […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-234765","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/234765","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=234765"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/234765\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=234765"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=234765"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=234765"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}