The contribution format income statement for Huerra Company for last year is given below: Total 992,000...

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The contribution format income statement for Huerra Company for last year is given below: Total 992,000 595, 200 396, 800 320, 800 Unit Sales $449.60 Variable expenses Contribution margin Fixed expenses Net operating incone Income taxes e 40% Net incone 29.76 19.84 16.04 76,000 3.80 1.52 $ 2.28 30,400 45,600 The company had average operating assets of $504,000 during the year. Required: 1. Compute the company's return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. For each of the following questions, Indicate whether the margin and turnover will Increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROl in (1) above. 2. Using Lean Production, the company is able to reduce the average level of inventory by $97,000. (The released funds are used to pay off short-term creditors.) 3. The company achieves a cost savings of $5.000 per year by using less costly materials. 4. The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $126,000. Interest on the bonds is $12,000 per year. Sales remain unchanged. The new, more efficlent equipment reduces production costs by $8,000 per year. 5. As a result of a more intense effort by salespeople, sales are Increased by 10%, operating assets remain unchanged. 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $17,000 is scrapped and written off as a loss. 7. At the beginning of the year, the company uses $183,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock. of its common stock. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Compute the company's return on investment (ROI) for the period using the ROI formyla stated in terms of margin and turnover. (Round your intermediate calculations and final answers to 2 decimal places. Margin Turnover ROI Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required S Regmuired 6 Required 7 Required 6 Using Lean Production, the company is able to reduce the average level of inventory by $97,000. (The released funds are used to pay off short-term creditors.) (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Tumover ROI S Beguired1 Required 3 > Complete this question by entering your answers in the tabs below. Regired 3 Required 6 Required 1 Required 2 Required 4 Requred 5 Required 7 The company achieves a cost savings of $5,000 per year by using less costly materials. (Round your intermediate caloulations and final answers to 2 decimal places.) Effect Margin Turnovor ROI Repuired 4 > of its common stock. ny uses S183,000 ot cash (received on accounts receivable) to repurchase and retire some Complete this question by entering your answers in the tabs below. Required 1 Requited 4 Required 2 Required 3 Required 5 Required 6 Required 7 The company issues bonds and uses the proceeds to purchase machinery and equlpment that increases average operating assets by $126,000. Interest on the bonds is $12,000 per year. Sales remain unchanged, The new, more efficient equipment reduces production costs by $8,000 per year. (Do not rourid intermediate calculations and round your final answers to 2 decimal places.) Show less a Effect Margin Turnover ROI Required 3 Required 5 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 As a result of a more intense effort by salespeople, sales are increased by 10%; operating assets remain unchanged. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Turnover ROI < Required 4 Required 6> Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Reguired 6 Required 7 At the beginning of the year, obsolete inventory carried on the books at a cost of $17,000 is scrapped and written off as a loss. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Turnover ROI < Required 5 Required 7> Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 At the beginning of the year, the company uses $183,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Turnover ROI < Required 6 Required 7 The contribution format income statement for Huerra Company for last year is given below: Total 992,000 595, 200 396, 800 320, 800 Unit Sales $449.60 Variable expenses Contribution margin Fixed expenses Net operating incone Income taxes e 40% Net incone 29.76 19.84 16.04 76,000 3.80 1.52 $ 2.28 30,400 45,600 The company had average operating assets of $504,000 during the year. Required: 1. Compute the company's return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. For each of the following questions, Indicate whether the margin and turnover will Increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROl in (1) above. 2. Using Lean Production, the company is able to reduce the average level of inventory by $97,000. (The released funds are used to pay off short-term creditors.) 3. The company achieves a cost savings of $5.000 per year by using less costly materials. 4. The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $126,000. Interest on the bonds is $12,000 per year. Sales remain unchanged. The new, more efficlent equipment reduces production costs by $8,000 per year. 5. As a result of a more intense effort by salespeople, sales are Increased by 10%, operating assets remain unchanged. 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $17,000 is scrapped and written off as a loss. 7. At the beginning of the year, the company uses $183,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock. of its common stock. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Compute the company's return on investment (ROI) for the period using the ROI formyla stated in terms of margin and turnover. (Round your intermediate calculations and final answers to 2 decimal places. Margin Turnover ROI Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required S Regmuired 6 Required 7 Required 6 Using Lean Production, the company is able to reduce the average level of inventory by $97,000. (The released funds are used to pay off short-term creditors.) (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Tumover ROI S Beguired1 Required 3 > Complete this question by entering your answers in the tabs below. Regired 3 Required 6 Required 1 Required 2 Required 4 Requred 5 Required 7 The company achieves a cost savings of $5,000 per year by using less costly materials. (Round your intermediate caloulations and final answers to 2 decimal places.) Effect Margin Turnovor ROI Repuired 4 > of its common stock. ny uses S183,000 ot cash (received on accounts receivable) to repurchase and retire some Complete this question by entering your answers in the tabs below. Required 1 Requited 4 Required 2 Required 3 Required 5 Required 6 Required 7 The company issues bonds and uses the proceeds to purchase machinery and equlpment that increases average operating assets by $126,000. Interest on the bonds is $12,000 per year. Sales remain unchanged, The new, more efficient equipment reduces production costs by $8,000 per year. (Do not rourid intermediate calculations and round your final answers to 2 decimal places.) Show less a Effect Margin Turnover ROI Required 3 Required 5 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 As a result of a more intense effort by salespeople, sales are increased by 10%; operating assets remain unchanged. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Turnover ROI < Required 4 Required 6> Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Reguired 6 Required 7 At the beginning of the year, obsolete inventory carried on the books at a cost of $17,000 is scrapped and written off as a loss. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Turnover ROI < Required 5 Required 7> Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 At the beginning of the year, the company uses $183,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin Turnover ROI < Required 6 Required 7

Answer rating: 100% (QA)

Solution 1 Particulars Amount Sales 99200000 Operating income 7600000 Average operating assets 49800... View the full answer