MARGIN, TURNOVER, RETURN ON INVESTMENT, AVERAGE OPERATING ASSETS Elway Company provided the following income statement for last year:

Sales $285,000 Less: Variable expenses 171,000 Contribution margin $114,000 Less: Fixed expenses 91,200 Operating income $ 22,800 At the beginning of last year, Elway had $180,000 in operating assets. At the end of the year, Elway had $200,000 in operating assets.

Required:

. Compute average operating assets.

. Compute the margin and turnover ratios for last year.

. Compute ROI.

Exercise