The contribution format income statement for Huerra Company for last year is given below:

The company had average operating assets of $$509,000$ during the year.

Required:

Compute the company's margin, turnover, and return on investment $($ROI$)$ for the period.

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 ROI figure. Consider each question separately, starting in each case from the data

used to compute the original ROI in $(1)$ above.

Using Lean Production, the company is able to reduce the average level of inventory by $$106,000.$

The company achieves a cost savings of $$8,000$ per year by using less costly materials.

The company purchases machinery and equipment that increases average operating assets by $$129,000.$ Sales remain unchanged.

The new, more efficient equipment reduces production costs by $$8,000$ per year.

As a result of a more intense effort by sales people, sales are increased by $10\%$; operating assets remain unchanged.

At the beginning of the year, obsolete inventory carried on the books at a cost of $$18,000$ is scrapped and written off as a loss,

thereby lowering net operating income.

At the beginning of the year, the company uses $$176,000$ of cash $($received on accounts receivable$)$ to repurchase some of its

common stock.

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Required $6$

At the beginning of the year, obsolete inventory carried on the books at a cost of $$18,000$ is scrapped and written off as a

loss, thereby lowering net operating income. $($Round your intermediate calculations and final answer to $2$ decimal places.$)$