Pelak Company had sales of $ 30,000,000, expenses of $ 27,600,000, and average operating assets of $ 6,000,000.
The following information pertains to Berting Inc. for last year:
Beginning inventory in units .......... —
Units produced ...................25,000
Units sold ..................23,600
Costs per unit:
Direct materials ................$ 4.00
Direct labor .................$ 1.60
Variable overhead ................$ 0.75
Fixed overhead* ...............$ 3.80
Variable selling expenses .............$ 3.00
Fixed selling and administrative costs ...... $ 24,300
* Fixed overhead totals $ 95,000 per year.
Required:
Compute the
(1) Operating income,
(2) Margin and turnover ratios,
(3) ROI.