Cornwall Company has two divisions, A and B. Information for each division is as follows: A B Net earnings for division $ 40,000 $ 260,000 Asset base for division $100,000 $1,200,000 Target rate of return 15% 18% Margin 10% 20% Weighted average cost of capital 12% 12% What is the total sales amount for B

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andromache andromache · Answer 1 · 2020-05-02T11:54:03+02:00

Answer:

$1,300,000

Explanation:

The computation of the total sales amount for B is shown below:

As we know that

Net income ÷ sales = Margin turnover

where,

Net income for division B is $260,000

And the margin turnover is 10%

Now placing these items values, the sales revenue for the division B is

$260,000 ÷ sales = 20%

So, the sales amount for division B is

= $260,000 ÷ 20%

= $1,300,000

We simply applied the above formula so that the total sales for division B could arrive

tallinn tallinn · Answer 2 · 2022-04-01T14:17:49+02:00

"The total sales amount for the division B is $1,300,000. To understand the calculations, check below".

The calculation of the total sales amount for B is shown downward:

As we know that

The formula is Net income ÷ sales = Margin turnover

where that,

The Net income for division B is $260,000

And also the margin turnover is 10%

Now We place these items' values, Then the sales revenue for the division B is

Then $260,000 ÷ sales = 20%

After that, the sales amount for division B is

Then = $260,000 ÷ 20%

After that = $1,300,000

Now, We applied the above formula so that the total sales for division B could reach

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