The Income Statement for Zeta Corp is presented below:

Totals Unit

Sales $5,000,000 $100.00

Variable Expenses 2,875,000 $ 55.00

CM $2,125,000 $45.00

Fixed Costs 1,500,000 3

NOI $ 725,000 14.5

Income Taxes @ 30% 217500

Average operating Assets: $2,000,000

REQUIRED:

Determine the impact of each of the following, and prepare a report to Management on your findings

Fill in the missing details

Compute the ROI for the period using Margin & Turnover

By using JIT, the company can reduce the inventory by $500,000

The Company can achieve savings of $2 per unit by using cheaper materials

The Company can increase sales by 10% without increasing operating assets

Obsolete items of $120,000 are scrapped and sold for book value

The Income Statement for Zeta Corp is presented below:

Totals Unit

Sales $5,000,000 $100.00

Variable Expenses 2,875,000 $ 55.00

CM $2,125,000 $45.00

Fixed Costs 1,500,000 ?

NOI $ 725,000 ?

Income Taxes @ 30% ?

Average operating Assets: $2,000,000

REQUIRED:

Determine the impact of each of the following, and prepare a report to Management on your findings

Fill in the missing details

Compute the ROI for the period using Margin & Turnover

By using JIT, the company can reduce the inventory by $500,000

The Company can achieve savings of $2 per unit by using cheaper materials

The Company can increase sales by 10% without increasing operating assets

Obsolete items of $120,000 are scrapped and sold for book value