Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Problem 11-20 Return on Investment (ROl) Analysis [LO11-1] The contribution format income statement for Huerra Company for last year is given below: Total Sales Variable
Problem 11-20 Return on Investment (ROl) Analysis [LO11-1] The contribution format income statement for Huerra Company for last year is given below: Total Sales Variable expenses Unit $ 994,000 $49.70 596,400 29.82 Contribution margin Fixed expenses 397,600 19.88 315,600 15.78 Net operating income Income taxes @ 40% 82,000 32,800 4.10 1.64 Net income S 49,200 2.46 The company had average operating assets of $490,000 during the year. Required 1. Compute the company's return on investment (ROl) for the period using the ROl formula stated in terms of margin and turnover. (Round your intermediate calculations and final answer to 2 decimal places.) Margin Turnover ROI For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROl figure. Consider each question separately, starting in each case from the data used to compute the original ROl in (1) above
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started