Calculating Average Operating Assets, Margin, Turnover, and Return on Investment East Mullett Manufacturing earned operating income last year as shown in the following income statement: Sales $531,250 Cost of goods sold 280,000 Gross margin $251,250 Selling and administrative expense 195,300 Operating income $55,950 Less: Income taxes (@ 40%) 22,380 Net income $33,570 At the beginning of the year, the value of operating assets was $390,000. At the end of the year, the value of operating assets was $460,000. Required: For East Mullett Manufacturing, calculate the following: 1. Average operating assets $fill in the blank 1 2. Margin (round to two decimal places) fill in the blank 2 % 3. Turnover (round to two decimal places) fill in the blank 3 4. Return on investment (round to one decimal place) fill in the blank 4 %
Calculating Average Operating Assets, Margin, Turnover, and Return on Investment East Mullett Manufacturing earned operating income last year as shown in the following income statement: Sales $531,250 Cost of goods sold 280,000 Gross margin $251,250 Selling and administrative expense 195,300 Operating income $55,950 Less: Income taxes (@ 40%) 22,380 Net income $33,570 At the beginning of the year, the value of operating assets was $390,000. At the end of the year, the value of operating assets was $460,000. Required: For East Mullett Manufacturing, calculate the following: 1. Average operating assets $fill in the blank 1 2. Margin (round to two decimal places) fill in the blank 2 % 3. Turnover (round to two decimal places) fill in the blank 3 4. Return on investment (round to one decimal place) fill in the blank 4 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Calculating Average Operating Assets, Margin, Turnover, and
East Mullett Manufacturing earned operating income last year as shown in the following income statement:
| Sales | $531,250 |
| Cost of goods sold | 280,000 |
| Gross margin | $251,250 |
| Selling and administrative expense | 195,300 |
| Operating income | $55,950 |
| Less: Income taxes (@ 40%) | 22,380 |
| Net income | $33,570 |
At the beginning of the year, the value of operating assets was $390,000. At the end of the year, the value of operating assets was $460,000.
Required:
For East Mullett Manufacturing, calculate the following:
| 1. Average operating assets | $fill in the blank 1 | |
| 2. Margin (round to two decimal places) | fill in the blank 2 | % |
| 3. Turnover (round to two decimal places) | fill in the blank 3 | |
| 4. Return on investment (round to one decimal place) | fill in the blank 4 | % |
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