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 $ 1,008,000 604,800 403,200 319,200 84,000 33,600 $ 50,400 Unit $ 50.40 30.24 20.16 15.96 4.20 1.68 $ 2.52 The company had average operating assets of $508,000 during the year. 5. As a result of a more intense effort by sales people, sales are increased by 20%, operating assets remain unchanged. 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $17,000 is scrapped and written off as a loss. 7. At the beginning of the year, the company uses $175,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock. Effect % Margin Turnover ROI % Effect % % Margin Turnover ROI % Effect % Margin Turnover ROI % %