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The contribution format income statement for Huerra Company for last year is given below Total Unit Sales Variable expenses Contribution margin Fixed expenses Net operating
The contribution format income statement for Huerra Company for last year is given below Total Unit Sales Variable expenses Contribution margin Fixed expenses Net operating income Income taxes Net operating income $996,000 $49.80 29.88 19.92 15.82 4.10 1.64 $2.46 597,600 398,400 316,400 82,000 32 800 $49 200 40 % The company had average operating assets of $495,000 during the year Requirement 1: Compute the company's return on investment (ROl) for the period using the ROl formula stated in terms of margin and turnover (Round your answer to 2 decimal places, e.g., .1234 as 12.3. Omit the "%" sign in your response.) eturn on investment Requirement 2: 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 ROl figure. Consider ach question separately, starting in each case from the data used to compute the original ROl in Requirement (1) above (a) Using Lean Production, the company is able to reduce the average level of inventory by $110 released funds are used to pay off short-term creditors ) (Round your answers to 2 decimal places Omit the"%"sign in your response.) ,000. (The
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