Page 417 - F2 - MA Integrated Workbook STUDENT 2018-19

Performance measurement techniques

Test your understanding 1

JUY has two production divisions, J and Y which operate as investment
centres. A report for July has been prepared for the two divisions and
extracts are shown below:

J Y
$000 $000

Sales revenue 300 550
Direct costs of production 160 230

Indirect costs of production 50 160
Non-production costs 25 32

Capital employed 500 1,300
Calculate the following for J and Y:

J Y

Gross margin % %

ROCE % %

Return on sales % %

409