Last year's contribution format income statement for Huerra Company is given below:

The company had average operating assets of $$507,000$ during the year.

Required:

Compute last year's margin, turnover, and return on investment $($ROI$).$

For each of the following questions, indicate whether last year's margin and turnover will increase, decrease, or remain unchang

as a result of the events described, and then compute the new ROI. Consider each question separately.

Using Lean Production, the company is able to reduce the average level of inventory by $$106,000.$

The company achieves a cost savings of $$9,000$ per year by using less costly materials.

The company purchases machinery and equipment that increase average operating assets by $$127,000.$ Sales remain unchange

The new, more efficient equipment reduces production costs by $$5,000$ per year.

As a result of a more intense effort by sales people, sales are increased by $15\%$; operating assets remain unchanged.

At the beginning of the year, obsolete inventory is scrapped, thereby lowering net operating income by $$19,000.$

At the beginning of the year, the company uses $$182,000$ of cash $($received on accounts receivable$)$ to repurchase some of its

common stock.