$\backslash$table$[[,$Total,Unit$],[$Sales$,$$ $1,000,000,$$ $50\mathrm{.}00],[$Variable expenses,$600,000,30\mathrm{.}00],[$Contribution margin,$400,000,20\mathrm{.}00],[$Fixed expenses,$316,000,15\mathrm{.}80],[$Net operating income,$84,000,4\mathrm{.}20],[$Income taxes @ $40\%,33,600,1\mathrm{.}68],[$Net income,$ $50,400,$$ $2\mathrm{.}52]]$

The company had average operating assets of $$491,000$ during the year.

Required:

Compute last year's margin, turnover, and return on investment $($ROI$).$

For each of the following questions, indicate whether last year's margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI. Consider each question separately.

$2.$ Using Lean Production, the company is able to reduce the average level of inventory by $$90,000.$

$3.$ The company achieves a cost savings of $$6,000$ per year by using less costly materials.

$4.$ The company purchases machinery and equipment that increase average operating assets by $$122,000.$ Sales remain unchanged.The company had average operating assets of $$491,000$ during the year.

Required:

Compute last year's margin, turnover, and return on investment $($ROI$).$

For each of the following questions, indicate whether last year's margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI. Consider each question separately.

$2.$ Using Lean Production, the company is able to reduce the average level of inventory by $$90,000.$

$3.$ The company achieves a cost savings of $$6,000$ per year by using less costly materials.

$4.$ The company purchases machinery and equipment that increase average operating assets by $$122,000.$ Sales remain unchanged. The new, more efficient equipment reduces production costs by $$6,000$ per year.

$5.$ As a result of a more intense effort by sales people, sales are increased by $20\%$; operating assets remain unchanged.

$6.$ At the beginning of the year, obsolete inventory is scrapped, thereby lowering net operating income by $$16,000.$

$7.$ At the beginning of the year, the company uses $$175,000$ of cash $($received on accounts receivable$)$ to repurchase some of its common stock.Complete this question by entering your answers in the tabs below.

Required $1$

Required $2$

Required $3$

Required $4$

The company achieves a cost savings of $$6,000$ per year by using less costly materials.

Note: Round your intermediate calculations and final answer to $2$ decimal places.

$\backslash$table$[[,,,$Effect$],[$Margin$,,\%,],[$Turnover$,,,],[$ROI$,\%,,]]$