Homework Answers
1.Operating Income = Revenue - Direct Cost - Indirect Cost
Revenue = 4945000
Direct Cost = 4320000
Indirect Cost = 0
Operating Income = 4945000 - 4320000 -0
Operating Income = 625000
2.Margin
Margin = Total sales - Total Income / Total Sales
4945000 - 4320000 / 4945000
625000 / 4945000 x 100
12.63%
Turnover Ratio = Sales / Average operating Assets
Sales = 4945000
Average operating Assets = 3230000
Turnover Ratio = 4945000 / 3230000
Turnover Ratio =1.53
3. Return on Investment = Margin x Turnover
Margin = 12.63
Turnover = 1.53
Return on Investment = 12.63 x 1.53
Return on Investment = 19.32%
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