CALCULATING AVERAGE OPERATING ASSETS, MARGIN, TURNOVER, AND RETURN ON INVESTMENT East Mullett Manufacturing earned operating income last year as shown in the following income statement:

Sales $531,250 Cost of goods sold 280,000 Gross margin $251,250 Selling and administrative expense 187,500 Operating income $ 63,750 At the beginning of the year, the value of operating assets was $390,000. At the end of the year, the value of operating assets was $460,000.

Required:

For East Mullett Manufacturing, calculate:

. Average operating assets

. Margin

. Turnover

. Return on investment Cornerstone Exercise