The contribution format income statement for Huerra Company for last year is given below: TotalUnitSales$4,000,000$80.00Variable expenses 2,800,000 56.00Contribution margin 1,200,000 24.00Fixed expenses 840,000 16.80Net operating income 360,000 7.20Income taxes @ 30% 108,000 2.16Net income$252,000$5.04 The company had average operating assets of $2,000,000 during the year. At the beginning of the year, the company uses $200,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock EffectMargin____%____Turnover____ ____ROI____%____

Profit margin is the ratio of Net Income to Sales of the company. Asset turnover ratio is the ratio…

Answered: e 360,000 7.20 Income taxes @ 30%…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The contribution format income statement for Huerra Company for last year is given below:

	Total	Unit
Sales	$	4,000,000	$	80.00
Variable expenses		2,800,000		56.00
Contribution margin		1,200,000		24.00
Fixed expenses		840,000		16.80
Net operating income		360,000		7.20
Income taxes @ 30%		108,000		2.16
Net income	$	252,000	$	5.04

The company had average operating assets of $2,000,000 during the year.

At the beginning of the year, the company uses $200,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock

			Effect
Margin	____	%	____
Turnover	____		____
ROI	____	%	____

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