The Millard Division's operating data for the past two years are provided below: Millard Division's margin in Year 2 was 150% of the margin in Year 1.The sales for Year 2 were:

A) $1,200,000
B) $3,200,000
C) $3,000,000
D) $3,333,333

Question

The Millard Division's operating data for the past two years are provided below:

Millard Division's margin in Year 2 was 150% of the margin in Year 1.The sales for Year 2 were:

A) $1,200,000
B) $3,200,000
C) $3,000,000
D) $3,333,333

Preya Sutarwalla · Accepted Answer

Final Answer : C, Explanation :  To find the sales for Year 2, we need to first find the margin for Year 1. Margin is given by the formula:Margin = (Sales - Cost of goods sold)/SalesIn Year 1, the margin was 10%. Using the formula, we can find the sales for Year 1:0.10 = (Sales1 - 2,000,000)/Sales1Sales1 = $2,222,222Next, we know that the margin in Year 2 was 150% of the margin in Year 1. Therefore, the margin in Year 2 was:0.10 x 1.5 = 0.15Using the formula again, we can find the sales for Year 2:0.15 = (Sales2 - X)/Sales2where X is the sales in Year 1.Solving for Sales2:Sales2 = $3,000,000Therefore, the best choice is C.

The Millard Division's operating data for the past two years are provided below: Millard Division's margin in Year 2 was 150% of the margin in Year 1.The sales for Year 2 were:

A) $1,200,000
B) $3,200,000
C) $3,000,000
D) $3,333,333

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The Millard Division's operating data for the past two years are provided below: Millard Division's margin in Year 2 was 150% of the margin in Year 1.The sales for Year 2 were:A) $1,200,000B) $3,200,000C) $3,000,000D) $3,333,333

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Learning Objectives

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Related questions

The Millard Division's operating data for the past two years are provided below: Millard Division's margin in Year 2 was 150% of the margin in Year 1.The sales for Year 2 were:

A) $1,200,000
B) $3,200,000
C) $3,000,000
D) $3,333,333