Question
Exercise 11-10 Cost-Volume-Profit Analysis and Return on Investment (ROI) [LO11-1] Posters.com is a small Internet retailer of high-quality posters. The company has $820,000 in operating
Exercise 11-10 Cost-Volume-Profit Analysis and Return on Investment (ROI) [LO11-1]
Posters.com is a small Internet retailer of high-quality posters. The company has $820,000 in operating assets and fixed expenses of $170,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,400,000 per year. The companys 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 companys return on investment (ROI) as sales increase?
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
