12.5 pt 2

The contribution format income statement for Huerra Company for last year is given below:

	Total		Unit
Sales	$	994,000	$	49.70
Variable expenses		596,400		29.82
Contribution margin		397,600		19.88
Fixed expenses		315,600		15.78
Net operating income		82,000		4.10
Income taxes @ 40%		32,800		1.64
Net income	$	49,200	$	2.46

The company had average operating assets of $495,000 during the year.

5. Sales are increased by 15%; operating assets remain unchanged. (Round your answers to 2 decimal places.) Effect Margin Turnover ROI 6. Obsolete inventory carried on the books at a cost of $19,000 is scrapped and written off as a loss. (Round your answers to 2 decimal places.) Turnover ROI 7. The company uses S182,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock. (Round your answers to 2 decimal places.) Effect Margin Turnover ROI