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 2. Margin (round to two decimal places) % 3. Turnover (round to two decimal places) 4. Return on investment (round to one decimal place) %
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 2. Margin (round to two decimal places) % 3. Turnover (round to two decimal places) 4. Return on investment (round to one decimal place) %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![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
2. Margin (round to two decimal places)
%
3. Turnover (round to two decimal places)
4. Return on investment (round to one decimal place)
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9440d08a-4c5e-4464-aab8-31e1fd834277%2F610fa061-8603-4d10-85ad-4b78398538c5%2F94sxvfu_processed.png&w=3840&q=75)
Transcribed Image Text: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
2. Margin (round to two decimal places)
%
3. Turnover (round to two decimal places)
4. Return on investment (round to one decimal place)
%
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