Posters.com is a small Internet retailer of high-quality posters. The company has $790,000 in operating assets...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Posters.com is a small Internet retailer of high-quality posters. The company has $790,000 in operating assets and fixed expenses of $154,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,300,000 per year. The company's contribution margin ratio is 11%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 11 cents. Required: 1. Complete the following table showing the relation between sales and return on investment (ROI). 2. What happens to the company's return on investment (ROI) as sales increase? Posters.com is a small Internet retailer of high-quality posters. The company has $790,000 in operating assets and fixed expenses of $154,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,300,000 per year. The company's contribution margin ratio is 11%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 11 cents. Required: 1. Complete the following table showing the relation between sales and return on investment (ROI). 2. What happens to the company's return on investment (ROI) as sales increase?
Expert Answer:
Answer rating: 100% (QA)
To calculate the return on investment ROI for Posterscom at different levels of sales we can use the following formula ROI Net Operating Income Operating Assets 100 Where Net Operating Income Sales Va... View the full answer
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
Students also viewed these accounting questions
-
Images.com is a small Internet retailer of high-quality posters. The company has $800,000 in operating assets and fixed expenses of $160,000 per year. With this level of operating assets and fixed...
-
Complete the following table showing which ledger account is to be debited and which is to be credited: Debit Credit al Sratorery purchased on credit from Gomley bl Rates paid by direct debit...
-
Consider the maleic anhydride process shown in Appendix B.5. Estimate the profit margin for this process using the costs of raw materials and products from Table 8.4. Figure B.5.1 Table 8.4 Costs of...
-
Suppose you own 80 shares of IBM common stock when the company declares a 4% stock dividend. What will you receive as a result?
-
For the homogeneous lamina shown in Figure 17, find m, My, Mx, x, and y. 1- +
-
When a company wants to reduce the market price per share of its stock, what action should it take? a. Issue a cash dividend b. Issue a stock dividend c. Do a reverse stock split d. Do a forward...
-
Refer to Assignment 5 in Chapter 17. Draft an opinion letter to Mrs. Dixon informing her of the results of your research and the likelihood that the holographic will submitted by Mary Cary will be...
-
Essay Questions 1) How technology adoption could offer the opportunity to supply chain and logistics operations? 20marks 2) Compare the concept of a modern supply chain with more traditional...
-
Hastings Company bases its variable overhead performance report on the actual direct labour- hours of the period. Data concerning the most recent year, which ended on December 31, are as follows:...
-
Fratello, Rengifo, and Trone (2013) interviewed nearly 500 New York City youth to understand their experience with stop, question, and frisk. Please provide some background to their study, including...
-
What are Treasury STRIPS? State one advantage of using STRIPS to construct a Liabilities Matching Bond Portfolio. State one difficulty for a STRIPS provider. [3] The Codgers Pension Fund has annual...
-
Waterway, Inc. applies overhead to production at a predetermined rate of 90% of direct labor cost. Job No. 250, the only job still in process at the end of August, has been charged with manufacturing...
-
Kramer Corporation began the current period with 4,020 units in process that were 100% complete as to materials and 60% complete as to conversion. Costs of $7.640 in direct materials and $4,740 in...
-
Question 1 A system delivering pure water to an aerospace manufacturing company uses the system structure seen in figure 1. The pump is set to 2.5 psi and water flows from the reservoir to points C,...
-
If the ball could continue to travel below its original level ( through an appropriately shaped hole in the ground ) , then negative values of y corresponding to times greater than 6 . 0 4 s would be...
-
a wind turbine generator is used to transform rotational mechanical energy into electrical energy. For this problems, we will use a lumped system model and assume the turbine intertia J1 and...
-
Consider a closed, rigid tank with a volume of 0.8L, filled with cold water initially at 27C. The tank is filled such that there are no voids (air pockets) within. The initial pressure within the...
-
Frieda Bronkowski has invented a new type of flyswatter. After giving the matter much thought, Frieda has decided to quit her $4,000 per month job with a consulting firm and produce and sell the...
-
Should standards be used to identify who to blame for problems?
-
What is meant by an activity base when dealing with variable costs? Give several examples of activity bases.
-
ANSI X3.5-1970-the information system flowcharting standards published by the American National Standards Institute-defines four groups of flowchart symbols and illustrates conventions regarding...
-
Which type of diagram emphasizes the physical description of a system? (a) analytic flowchart (b) logical data flow diagram (DFD) (c) HIPO (d) IPO
-
Structured systems analysis can best be referred to as ( ___________________ ). (a) a process of increasingly complex sets of controls (b) a process of successive refinement (c) a procedure for...
Study smarter with the SolutionInn App