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Problem 11-24 (Algo) Return on Investment (ROI) Analysis (LO11-1] The contribution format income statement for Huerra Company for last year is given below: $ Sales
Problem 11-24 (Algo) Return on Investment (ROI) Analysis (LO11-1] The contribution format income statement for Huerra Company for last year is given below: $ Sales Variable expenses Contribution margin Fixed expenses Net operating income Income taxes @ 40% Net income Total 996,000 597,600 398,400 318,400 80,000 32,000 48,000 Unit $ 49.80 29.88 19.92 15.92 4.00 1.60 $ 2.40 $ The company had average operating assets of $493,000 during the year. new, educes production per year. 5. As a result of a more intense effort by sales people, sales are increased by 15%; operating assets remain unchanged. 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $19,000 is scrapped and written off as a loss, thereby lowering net operating income. 7. At the beginning of the year, the company uses $184,000 of cash (received on accounts receivable) to repurchase some of its common stock
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