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Exercise 12-6 (continued)
3.
Net operating income
Margin = Sales
$800,000 + $250,000
=
$8,000,000 + $2,000,000
$1,050,000
= = 10.5%
$10,000,000
Sales
Turnover = Average operating assets
$8,000,000 + $2,000,000
= $3,200,000 + $800,000
$1
= 0,000,000 = 2.5
$4,000,000
ROI = Margin × Turnover
= 10.5% × 2.5 = 26.25%
Exercise 12-11 (continued)
4. Each office’s individual performance should be based on the scorecard
measures only if the measures are controllable by those employed at
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