Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 10-10 Cost-Volume-Profit Analysis and Return on Investment (ROI) (LO10-1) Posters.com is a small Internet retailer of high-quality posters. The company has $800,000 in operating

image text in transcribed
image text in transcribed
Exercise 10-10 Cost-Volume-Profit Analysis and Return on Investment (ROI) (LO10-1) Posters.com is a small Internet retailer of high-quality posters. The company has $800,000 in operating assets and fixed expenses of $154,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,200,000 per year. The company's contribution margin ratio is 9%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 9 cents. Required: 1. Complete the following table showing the relation between sales and return on investment (ROI) 2. What happens to the company's return on investment (ROI) as sales increase? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table showing the relation between sales and return on investment (ROI), (Round your percentage answers to 2 decimal places.) Sales Net Operating ROI Average Operating Assets Income % S 269,000 $ 800,000 $ 4,700.000 $ 4,800,000 $ 800,000 % s 800,000 $ $ B00,000 % 4,900,000 5 5,000,000 $ 5,100,000 $ 5,200,000 s 800,000 % $ 800.000 % Exercise 10-10 Cost-Volume-Profit Analysis and Return on Investment (ROI) (L010-11 Posters.com is a small Internet retailer of high-quality posters. The company has $800,000 in operating assets and fixed expenses of $154,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,200,000 per year. The company's contribution margin ratio is 9%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 9 cents. Required: 1. Complete the following table showing the relation between sales and return on investment (ROI). 2. What happens to the company's return on investment (ROI) as sales increase? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What happens to the company's return on investment (ROI) as sales increase? Dincreases Decreases Required 1 Bunun

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Routledge Companion To Accounting And Risk

Authors: Margaret Woods

1st Edition

1138860123, 9781138860124

More Books

Students also viewed these Accounting questions

Question

What could Jean do to break the Facebook habit?

Answered: 1 week ago