Chapter 10 C1Cullumber 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 (c1)X Your answer is incorrect.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 aluminum product line manager was able to increase sales volume such that the newasset turnover was 2.20 times, what would be the new operating income? (Round variable cost ratio to 2 decimal places, e.g. 5.25and final answers to 0 decimal places, e.g. 12,500.)Operating income$1704000What would be the new return on investment? (Round ROI to 2 decimal places, e.g. 5.12%.)New ROI56.8| %eTextbook and Media

Here in the question, we need to find the new operating income of the product line aluminum after…

Answered: Cullumber produces and sells two…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Chapter 10 C1

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

(c1)
X Your answer is incorrect.
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 aluminum product line manager was able to increase sales volume such that the new
asset turnover was 2.20 times, what would be the new operating income? (Round variable cost ratio to 2 decimal places, e.g. 5.25
and final answers to 0 decimal places, e.g. 12,500.)
Operating income
$
1704000
What would be the new return on investment? (Round ROI to 2 decimal places, e.g. 5.12%.)
New ROI
56.8| %
eTextbook and Media

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