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The contibution format income statement for Huema Company for last year is given below 80,000 33.44 The company had average operating assets of $506,000
The contibution format income statement for Huema Company for last year is given below 80,000 33.44 The company had average operating assets of $506,000 during the year Required 1. Compute the company's margin, turnover and return on investment (RO for the period. For each of the following questions, indicate whether the margin and sumover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure, Consider each question separately starting in each case from the dela used to compute the original ROI in above 2. Using Lean Production, the company is able to reduce the average level of invemory by $107000 3. The company achieve a cost savings of $1,000 per year by using less costly mater 4. The company purchases machinery and equipment that increases average operating sets by $130,000 Sees remain unchanged. The new more efficient equipment reduces production costs $7,000 per ye 5 As a result of a more intense effort by sales people, sales are increased by 20% operating assets remain unchanged the beginning of the year, obsolete inventory carried on the books at a cost of $15,000 sopped and written off as a loss, thereby lowering net operating income TALL beginning of the year 1 Company uses $184.000 of can preced on accounts receivables to repurchase some of its common stock only 5-7
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