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

	Total		Unit
Sales	$	4,000,000	$	80.00
Variable expenses		2,800,000		56.00
Contribution margin		1,200,000		24.00
Fixed expenses		840,000		16.80
Net operating income		360,000		7.20
Income taxes @ 30%		108,000		2.16
Net income	$	252,000	$	5.04

The company had average operating assets of $2,000,000 during the year.

5. As a result of a more intense effort by salespeople, sales are increased by 20%; operating assets remain unchanged.

5a. What is the Margin %

5b. What is the Turn over for this: This should be a small number.

5c. What is the ROI %

6. At the beginning of the year, obsolete inventory carried on the books at a cost of $40,000 is scrapped and written off as a loss.

6a. What is the Margin %

6b. What is the Turn over for this: This should be a small number.

6c. What is the ROI %

7. At the beginning of the year, the company uses $200,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock.

7a. What is the Margin %

7b. What is the Turn over for this: This should be a small number.

7c. What is the ROI %