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The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 1,002,000 $ 50.10 Variable expenses 601,200 30.06
The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 1,002,000 $ 50.10 Variable expenses 601,200 30.06 Contribution margin 400,800 20.04 Fixed expenses 322,800 16.14 Net operating income 78,000 3.90 Income taxes @ 40% 31,200 1.56 Net income $ 46,800 $ 2.34 The company had average operating assets of $505,000 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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