Question: The three divisions of Dixie Foods are
The three divisions of Dixie Foods are Cereal, Produce, and Snacks. The divisions are structured as investment centers. The following responsibility reports were prepared for the three divisions for the prior year: 
1. Which division is making the best use of invested assets and thus should be given priority for future capital investments? 2. Assuming that the minimum acceptable rate of return on new projects is 10%, would all investments that produce a return in excess of 10% be accepted by the divisions? 3. Determine the overall return on investment for Dixie Foods. Round to one decimal place. 4. Can you identify opportunities for improving Dixie Foods’ financial performance
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Cereal Produce Snacks $ 9,000,000 (6,300,000) Revenues $5,400,000 $16,000,000 Operating expenses (4,200,000) (12,800,000) Operating income before service department charges $ 3,200,000 $ 2,700,000 $1,200,000 Service department charges: Promotion $ (500,000) $ (1,500,000) (740,000) $ (2,240,000) $ 960,000 $ 8,000,000 $(1,200,000) (420,000) $(1,620,000) $ 1,080,000 $ 5,000,000 Legal (268,000) Total service department charges Operating income $ (768,000) $ 432,000 Invested assets $4,500,000
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