7 requirements

1 The contribution format income statement for Huerta Company for last year is given below Total Unit Sales $4,000,000 $ 0.00 Variable expenses 2. 16.00 Contribution margin 1.200,00 24.00 Fixed expenses 10,000 16.30 Net operating income 60.000 Income taxes 100,000 3.16 Het income $ 25,000 $ 5.04 book Ask rence The company had average operating assets of $2.000.000 during the year Required: 1. Compute the company's margin, turnover and return on investment (Ron for the period 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 figure. Consider each question separately, starting in each come from the data used to compute the original Rolin (1) above 2 Using Lean Production, the company is able to reduce the average level of inventory by $400,000 3 The company achieves a cost savings of $32.000 per year by using less costly materials 4 The company purchases machinery and equipment that increases average operating ossets by $500,000 Sales remain unchanged The new, more efficient equipment reduces production costs by $20,000 per year 5. As a result of a more intense effort by salespeople, sales are increased by 20%, operating assets remain unchanged. 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $40,000 is scrapped and written off as a loss. thereby lowering niet operating income 7. At the beginning of the year, the company uses $200,000 of cash (received on accounts receivable) to repurchase some of its common stock