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 $820,000 in operating

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 $820,000 in operating assets and fixed expenses of $158,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4,900,000 per year. The company's contribution margin ratio is 11%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 11 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.) ROI Sales Average Net Operating Operating Income Assets 10.00 $ 326,000 $ 820,000 | $ 820,000 4,500,000 $ 820,000 4,600,000 4,700,000 $ 820,000 $ 820,000 4,800,000 $ 820,000 4,900,000

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

Step: 3

blur-text-image

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

Night Comes To The Cumberlands A Biography Of A Depressed Area

Authors: Harry M. Caudill

1st Edition

1334682070, 978-1334682070

More Books

Students also viewed these Accounting questions

Question

7. Explain how an employee could reduce stress at work.

Answered: 1 week ago