Selected data from Kemp Corporation are reproduced below:

KEMP CORPORATION

Product$-$Line Information $($$ thousands$)$

Year $1$ Year $2$ Year $3$ Year $4$

Data communications equipment

Net sales.................................................$$4,616$ $$5,630$ $$4,847$ $$6,890$

Income contribution $................................5708769961,510$

Inventory $.................................................2,6152,4692,1031,897$

Time recording devices

Net sales................................................. $3,3944,2004,3764,100$

Income contribution $................................44131134412$

Inventory $.................................................1,1932,2342,5742,728$

Hardware for electronics industry

Net sales................................................. $$ $ $1,564$ $ $1,850$

Income contribution $................................771919$

Inventory $.................................................331287$

Home sewing products

Net sales.................................................$$1,505$ $ $1,4361,4081,265$

Income contribution $................................291289276342$

Inventory $.................................................398534449526$

Corporate totals

Net sales................................................. $9,51511,26612,19514,105$

Income contribution $................................1,3021,4762,0773,183$

Inventory $.................................................4,2065,2375,4575,438$

$$ 

 

Required:

a$.$ For Year $4,$ compute the following ratios:

$(1)$ Inventory$/$Sales$.$

$(2)$ Inventory$/$Income contribution.

b$.$ Compute the percentage of each product line$$s income contribution to the total for each year. Interpret this

evidence.

c$.$ Comment on the desirability of an investment in each product line.