10hw-5

The contribution format income statement for Huerra Company for last year is given below. Sales Variable expenses Contribution margin Fived expenses Net operating income Income taxes 40% Net Income Total Unit $ 1,010,00 50,50 606,00 30.30 404,000 20.20 322,000 16.10 82,00 4:10 32,800 1.64 $ 19,2005 2.46 The compony had average operating assets of $491000 during the year Required: 1. Compute the company's return on investment (ROI) for the period using the Rol formula stated in terms of margin and turnover For each of the following questions, indicate whether the margin and turnover will increase decrease or remain unchanged as a result of the events described, and then compute the new ROI figureConsider cach question separately starting in each case from the data used to compute the orginal ROI in (1) above 2. Using Lean Production, the company is able to reduce the average level of inventory by $103.000 The released funds are used to pay off short term creditors) 3 The company achieves a cost savings of $13.000 per year by using less costly moteno 4 The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $130,000 Interest on the bonds is $13.000 per year Sales remain unchanged the new more efficient equipment reduces production costs by $7000 per year 5. As a result of a more intense effort by salespeople, sales are increased by 10%. operating ossets remain unchanged 6. At the beginning of the year, obsolete inventory cared on the books at a cost of $19.000 is scrapped and written off as a loss 7 At the beginning of the year the company uses $177.000 or cash (received on accounts recevable to repurchase and retire some of its common stock Complete this question by entering your answers in the tabs below. edit DA RE Der 2 Using Lean Production, the company is able to reduce the average level of inventory by $103.000. (i ne released funds are used to pay off short-term creditors.) 3. The company achieves a cost savings of $13,000 per year by using less costly materials 4. The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $130,000. Interest on the bonds is $13,000 per year Sales remain unchanged. The new, more efficient equipment reduces production costs by $7,000 per year. 5. As a result of a more intense effort by salespeople, sales are increased by 10%; operating assets remain unchanged. 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $19,000 is scrapped and written off as a loss 7 At the beginning of the year, the company uses $177,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required s Required 6 Required 7 Compute the company's return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. (Round your intermediate calculations and final answers to 2 decimal places.) Margin Turnover ROI 8.12 206 16.70 Required 2 > 4 The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $130,000. Interest on the bonds is $13,000 per year. Sales remain unchanged. The new, more efficient equipment reduces production costs by $7000 per year. 5. As a result of a more intense effort by salespeople, sales are increased by 10%, operating assets remain unchanged 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $19.000 is scrapped and written off as a loss 7 At the beginning of the year, the company uses $177000 of cash (received on accounts receivable) to repurchase and retire some of its common stock Complete this question by entering your answers in the tabs below. Required Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Using Lean Production, the company is able to reduce the average level of inventory by $103,000. (The released funds are used to pay off short term creditors.) (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Turnover ROI 4 The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $130.000. Interest on the bonds is $13,000 per year Sales remain unchanged. The new, more efficient equipment reduces production costs by $7000 per year 5. As a result of a more intense effort by salespeople, sales are increased by 10% operating assets remain unchanged 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $19.000 is scrapped and written off as a loss 7 At the beginning of the year, the company uses $177,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock Complete this question by entering your answers in the tabs below. Required 1 Required 2 Reagged 3 Required 4 Required 5 Required 6 Required Using Lean Production, the company is able to reduce the average level of inventory by $103,000. (The released funds are used to pay off short-term creditors.) (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Tumover RO 4 The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $130,000. Interest on the bonds is $13,000 per year Sales remain unchanged. The new, more efficient equipment reduces production costs by $7,000 per year 5 As a result of a more intense effort by salespeople, sales are increased by 10%, operating assets remain unchanged 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $19,000 is scrapped and written off as a loss. 7 At the beginning of the year, the company uses $177,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required a Required 4 Required 5 Required 6 Required 7 The company achieves a cost savings of $13,000 per year by using less costly materials. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Tumover ROL 4 The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $130,000. Interest on the bonds is $13,000 per year Sales remain unchanged. The new, more efficient equipment reduces production costs by $7000 per year 5. As a result of a more intense effort by salespeople sales are increased by 10%, operating assets remain unchanged 6 At the beginning of the year, obsolete inventory carried on the books at a cost of $19,000 is scrapped and written off as a loss. 7 At the beginning of the year, the company uses $177,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Required 4 Required 5 Required 6 Required 7 The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $130,000. Interest on the bonds is $13,000 per year. Sales remain unchanged. The new, more efficient equipment reduces production costs by $7,000 per year. (Do not found intermediate calculations and round your final answers to 2 decimal places) Show less Effect Margin Turnover ROL 4. The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $130,000 Interest on the bonds is $13,000 per year. Soles remain unchanged. The new, more efficient equipment reduces production costs by $7,000 per year 5. As a result of a more intense effort by salespeople, sales are increased by 10%, operating assets remain unchanged 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $19,000 is scrapped and written off as a loss 7 At the beginning of the year, the company uses $177000 of cash (received on accounts receivable) to repurchase and retire some of its common stock Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Required 4 Required 5 Required Required 7 As a result of a more intense effort by salespeople, sales are increased by 10%; operating assets remain unchanged. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Turnover ROI 4. The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $130.000 Interest on the bonds is $13,000 per year Sales remain unchanged. The new, more efficient equipment reduces production costs by $7,000 per year. 5 As a result of a more intense effort by salespeople, sales are increased by 10%, operating assets remain unchanged 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $19,000 is scrapped and written off as a loss. 7 At the beginning of the year, the company uses $177,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock Complete this question by entering your answers in the tabs below. Required Required 2 Required 3 Required Required 5 Reguired 6 Required 7 At the beginning of the year, obsolete inventory carried on the books at a cost of $19,000 is scrapped and written off as a loss. (Round your intermediate calculations and final answers to 2 decimal places) Effect Margin Tumover ROL 4 The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $130,000. Interest on the bonds is $13,000 per year Sales remain unchanged. The new, more efficient equipment reduces production costs by $7,000 per year 5 As a result of a more intense offort by salespeople, sales are increased by 10% operating assets remain unchanged. 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $19,000 is scrapped and written off as a loss 7 At the beginning of the year, the company uses $177,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required Required 6 Relaluired At the beginning of the year, the company uses $177,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Turnover ROI