Question

The contribution format income statement for Huerra Company for last year is given below: Sales Variable expenses Contribution margin Fixed expenses Net operating income Income taxes @ 40% Net income Total $ 1,004,000 602,400 401,600 323,600 78,000 31,200 $ 46,800 Unit $50.20 30.12 20.08 16.18 3.90 1.56 $ 2.34 The company had average operating assets of $504,000 during the year.

Answer 1

Answer with full working is given below

1. Sales Variable Expense Contribution Margin Fixed Cost Net Operating Income $1,004,000 $602,400 $401,600 $323,600 $78,000 Average Operating Assets $504,000 ROI Profit Margin Profit Sales Turnover Sales Operating Assets $78,000 $1,004,000 $1,004,000 $504,000 Profit Margin 7.8% Turnover 1.99 ROI 15.5% 2. Sales Variable Expense Contribution Margin Fixed Cost Net Operating Income $1,004,000 $602,400 $401,600 $323,600 $78,000 Average Operating Assets $396,000 Revised ROI Profit Margin Profit Sales Turnover Sales Operating Assets $78,000 $1,004,000 $1,004,000 $396,000 Profit Margin 7.8% Turnover 2.54 ROI 19.7% 3. Sales Variable Expense Contribution Margin Fixed Cost Net Operating Income $1,004,000 $597,400 Revised $406,600 $323,600 $83,000 Average Operating Assets $504,000 ROI Profit Margin Profit Sales Turnover Sales Operating Assets $83,000 $1,004,000 $1,004,000 $504,000 Profit Margin 8.3% Turnover 1.99 ROI 16.5% 4. Sales Variable Expense Contribution Margin Fixed Cost Net Operating Income $1,004,000 $599,400 Revised $404,600 $323,600 $81,000 Average Operating Assets $630,000 Revised ROI Profit Margin Profit Sales Turnover Sales Operating Assets $81,000 $1,004,000 $1,004,000 $630,000 Profit Margin 8.1% Turnover 1.59 ROI 12.9% 5. Sales Variable Expense Contribution Margin Fixed Cost Net Operating Income $1,204,800 Revised $722,880 Revised $481,920 $323,600 $158,320 $504,000 Average Operating Assets (Revised) ROI Profit Margin Profit Sales Turnover Sales Operating Assets $158,320 $1,204,800 $1,204,800 $504,000 Profit Margin 13.1% Turnover 2.39 ROI 31.4% 6. Sales Variable Expense Contribution Margin Fixed Cost Net Operating Income $1,004,000 $602,400 $401,600 $323,600 $78,000 Average Operating Assets $489,000 Revised ROI Profit Margin Profit Sales Turnover Sales Operating Assets $78,000 $1,004,000 $1,004,000 $489,000 Profit Margin 7.8% Turnover 2.05 ROI 16.0% 7. Sales Variable Expense Contribution Margin Fixed Cost Net Operating Income $1,004,000 $602,400 $401,600 $323,600 $78,000 Average Operating Assets $326,000 Revised ROI Profit Margin Profit Sales Turnover Sales Operating Assets $78,000 $1,004,000 $1,004,000 $326,000 Profit Margin 7.8% Turnover 3.08 | ROI 23.9%