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Nash Inc. is the only player in the classy snow shovel market. The variety of shovel designs includes camouflage (both green and pink, of
Nash Inc. is the only player in the classy snow shovel market. The variety of shovel designs includes camouflage (both green and pink, of course), snowman, beach, and northern lights. Nash purchases basic aluminum snow shovels from a supplier, applies its durable designs, and sells the shovels for $30 each. Last year, the company generated $58,000 in operating income, based on the following details. Sales volume in units 10,300 Operating expenses $85,000 DM cost per unit $8.00 DL cost per unit $3.00 Variable-MOH per unit $5.00 Fixed-MOH per unit $2.00 This year, the company realizes that its operating expenses will increase by $16,000 and its direct labor costs will increase by 20% per unit. How much operating income will the company generate this year if it uses a 50% markup on total cost, while still expecting a 30% increase in volume? If the company's asset base is $1,749,000, what is the ROI earned under this scenario? (Round ROI to 2 decimal places, e.g. 15.25%.) Operating income $ ROI %
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