Posters.com is a small Internet retailer of high-quality posters. The company has $800,000 in operating assets and fixed expenses of $168,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4,700,000 per year. The company's contribution margin ratio is 9%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 9 cents. Required: 1. Complete the following table showing the relation between sales and return on investment (ROI). 2. What happens to the company's return on investment (ROI) as sales increase? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table showing the relation between sales and return on investment (ROI). (Round your percentage answers to 2 decimal places.) Net Operating Sales Income Average Operating Assets ROI % $ 4,200,000 $ 210,000 $ 800,000 $ 4,300,000 $ 800,000 $ 4,400,000 $ 800,000 $ 4,500,000 $ 800,000 $ 4,600,000 $ 800,000 $ 4,700,000 $ 800,000 < Prev 3 of 6 Next >

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Posters.com is a small Internet retailer of high-quality posters. The company has $800,000 in operating assets and fixed expenses of
$168,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4,700,000 per
year. The company's contribution margin ratio is 9%, which means that an additional dollar of sales results in additional contribution
margin, and net operating income, of 9 cents.
Required:
1. Complete the following table showing the relation between sales and return on investment (ROI).
2. What happens to the company's return on investment (ROI) as sales increase?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Complete the following table showing the relation between sales and return on investment (ROI). (Round your percentage
answers to 2 decimal places.)
Net Operating
Sales
Income
Average
Operating
Assets
ROI %
$ 4,200,000 $ 210,000 $
800,000
$ 4,300,000
$
800,000
$ 4,400,000
$
800,000
$ 4,500,000
$
800,000
$ 4,600,000
$
800,000
$ 4,700,000
$
800,000
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3 of 6
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Transcribed Image Text:Posters.com is a small Internet retailer of high-quality posters. The company has $800,000 in operating assets and fixed expenses of $168,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4,700,000 per year. The company's contribution margin ratio is 9%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 9 cents. Required: 1. Complete the following table showing the relation between sales and return on investment (ROI). 2. What happens to the company's return on investment (ROI) as sales increase? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table showing the relation between sales and return on investment (ROI). (Round your percentage answers to 2 decimal places.) Net Operating Sales Income Average Operating Assets ROI % $ 4,200,000 $ 210,000 $ 800,000 $ 4,300,000 $ 800,000 $ 4,400,000 $ 800,000 $ 4,500,000 $ 800,000 $ 4,600,000 $ 800,000 $ 4,700,000 $ 800,000 < Prev 3 of 6 Next >
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