Ch 10Cullumber produces and sells two products—aluminum and vinyl. Each of these products is made in a dedicated manufacturing facility, and the product line managers are evaluated based on the product line’s return on investment. The following data is from the most recent year of operations. Aluminum Vinyl Sales $4,800,000 $4,200,000 Variable costs 2,304,000 2,355,000 Direct fixed costs 1,728,000 1,530,000 Average assets 3,200,000 1,500,000 Both product line managers would like to improve their respective returns on investment, and each manager has a differentidea about how to accomplish this. If the vinyl product line manager was able to reduce variable cost per unit by 8%, what wouldbe the new operating income? (Round Operating income to O decimal places, e.g. 12,500.)New operating income$What would be the new return on investment? (Round ROI to 2 decimal places, e.g. 5.12%.)New ROIeTextbook and Media

A company's contribution margin is computed by deducting variable costs from sales revenue. The…

Answered: Both product line managers would like…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Ch 10

Cullumber produces and sells two products—aluminum and vinyl. Each of these products is made in a dedicated manufacturing facility, and the product line managers are evaluated based on the product line’s return on investment. The following data is from the most recent year of operations.

	Aluminum	Vinyl
Sales	$4,800,000	$4,200,000
Variable costs	2,304,000	2,355,000
Direct fixed costs	1,728,000	1,530,000
Average assets	3,200,000	1,500,000

Both product line managers would like to improve their respective returns on investment, and each manager has a different
idea about how to accomplish this. If the vinyl product line manager was able to reduce variable cost per unit by 8%, what would
be the new operating income? (Round Operating income to O decimal places, e.g. 12,500.)
New operating income
$
What would be the new return on investment? (Round ROI to 2 decimal places, e.g. 5.12%.)
New ROI
eTextbook and Media

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