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The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 994,000 $ 49.70 Variable expenses 596,400 29.82
The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 994,000 $ 49.70 Variable expenses 596,400 29.82 Contribution margin 397,600 19.88 Fixed expenses 313,600 15.68 Net operating income 84,000 4.20 Income taxes @ 40% 33,600 1.68 Net income $ 50,400 $ 2.52 The company had average operating assets of $502,000 during the year. Required: 1. Compute the companys 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
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