Question
Westerville Company reported the following results from last years operations: Sales $ 1,200,000 Variable expenses 420,000 Contribution margin 780,000 Fixed expenses 600,000 Net operating income
Westerville Company reported the following results from last years operations:
| Sales | $ | 1,200,000 |
| Variable expenses | 420,000 | |
| Contribution margin | 780,000 | |
| Fixed expenses | 600,000 | |
| Net operating income | $ | 180,000 |
| Average operating assets | $ | 600,000 |
| This year, the company has a $137,500 investment opportunity with the following cost and revenue characteristics: |
| Sales | $ | 220,000 | |
| Contribution margin ratio | 60 | % of sales | |
| Fixed expenses | $ | 99,000 | |
| The companys minimum required rate of return is 20%. | ||||||||||||
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The Practice Of Modern Internal Auditing
Authors: Lawrence B Sawyer
2nd Edition
0894130927, 978-0894130922
