Question: Selected data from Kemp Corporation are reproduced below: Required: a. For Year 4, compute the following ratios: (1) Inventory/Sales. (2) Inventory/Income contribution. b. Compute the

Selected data from Kemp Corporation are reproduced below:

Required:
a. For Year 4, compute the following ratios:
(1) Inventory/Sales.
(2) Inventory/Income contribution.
b. Compute the percentage of each product lineâ€™s income contribution to the total for each year. Interpret this evidence.
c. Comment on the desirability of an investment in each productline.

KEMP CORPORATION Product-Line Information (S thousands) Year 1 Year 2 Year 3 Year 4 Data communications equipment $4,847 996 2,103 $4,616 Net sales Income contribution Inventory $5,630 $6,890 1,510 1,897 2,615 2,469 Time recording devices Net sales Income contribution Inventory 3,394 441 1,193 4,200 311 2 234 4376 34 2,574 4,100 412 2,728 Hardware for electronics industry 1,564 Net sales income contribution. .- Inventory $1,850 919 287 . 331 Home sewing products $1,505 291 398 $1,436 289 Net sales 1,265 342 526 Inventory 449 Corporate totals Net sales Income contribution Inventory 9,515 1,302 4,206 11,266 1,476 5,237 12,195 2,077 5,457 14,105 3,183 5,438

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