Question
The contribution format income statement for Strickland, Inc., for its most recent period is given below: Total Unit Sales $990,000 $49.50 Variable expenses 594,000 29.70
The contribution format income statement for Strickland, Inc., for its most recent period is given below:
Total Unit
Sales $990,000 $49.50
Variable expenses 594,000 29.70
Contribution margin 396,000 19.80
Fixed expenses 318,000 15.90
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 $503,000 during the period.
The company issues bonds and uses the proceeds to purchase $128,000 in machinery and equipment at the beginning of the period. Interest on the bonds is $14,000 per period. Sales remain unchanged. The new, more efficient equipment reduces production costs by $5,000 per period.(Round your intermediate calculations and Turnover answers to 2 decimal places. Round your Margin and ROI percentage answers to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)
Margin: ? %
Turnover ? %
ROI ? %
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