Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 11-11 (Static) 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 $1,000,000

image text in transcribed

Exercise 11-11 (Static) 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 $1,000,000 in operating assets and fixed expenses of $150,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $3,000,000 per year. The company's contribution margin ratio is 25%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 25 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 1 decimal place.) Net Operating Sales Income Average Operating Assets ROI % $ 2,500,000 $ 475,000 $ 1,000,000 $ 2,600,000 $ 1,000,000 $ 2,700,000 $ 1,000,000 $ 2,800,000 $ 1,000,000 $ 2,900,000 $ 1,000,000 $ 3,000,000 $ 1,000,000 Required t Required 2 >

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

Managerial Accounting

Authors: Stacey Whitecotton, Robert Libby, Fred Phillips

3rd edition

77826485, 978-0077722074, 77722078, 978-0077826482

More Books

Students also viewed these Accounting questions

Question

Draw a Feynman diagram for the reaction n + v p + .

Answered: 1 week ago

Question

What are the most important learnings from the project?

Answered: 1 week ago