594,000 29.70 316,000 15.80 32,000 1.60 $48,000 $2.40 Compute the company\'s ret
ID: 2389139 • Letter: 5
Question
594,000
29.70
316,000
15.80
32,000
1.60
$48,000
$2.40
Compute the company's return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. (Round your answer to 2 decimal places, e.g., .1234 as 12.3.)
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 ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in Requirement (1) above.
Using Lean Production, the company is able to reduce the average level of inventory by $98,000. (The released funds are used to pay off short-term creditors.) (Round your answers to 2 decimal places.)
The company achieves a cost savings of $9,000 per year by using less costly materials. (Round your answers to 2 decimal places.)
The company issues bonds and uses the proceeds to purchase $127,000 in machinery and equipment at the beginning of the period. Interest on the bonds is $16,000 per year. Sales remain unchanged. The new, more efficient equipment reduces production costs by $6,000 per year. (Round your answers to 2 decimal places.)
Obsolete inventory carried on the books at a cost of $16,000 is scrapped and written off as a loss.(Round your answers to 2 decimal places. )
The company uses $184,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock. (Round your answers to 2 decimal places. )
The contribution format income statement for Huerra Company for last year is given below:Explanation / Answer
Compute the company's return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover.
Total Unit Sales $990,000 $49.50 Variable expenses 594000 29.7 Contribution margin 396000 $19.80 Fixed expenses 316000 15.8 Net operating income 80000 $4.00Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.