Posters.com is an Internet retailer of high-quality posters. The company has $790,000 in operating assets and fixed expenses of $160,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,300,000 per year. The company's contribution margin ratio is 11%, which means an additional dollar of sales results in additional contribution margin. and net operating income, of 11 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). Note: Round your percentage answers to 2 decimal places. Sales Net Operating Income Average Operating ROI% Assets $ 4,800,000 $ 368,000 S 790,000 48.58 $ 4,900,000 S 790,000 $ 5,000,000 S 790,000 $ 5,100,000 S 790,000 $ 5,200,000 $ 790,000 I $ 5,300,000 $ 790,000
Posters.com is an Internet retailer of high-quality posters. The company has $790,000 in operating assets and fixed expenses of $160,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $5,300,000 per year. The company's contribution margin ratio is 11%, which means an additional dollar of sales results in additional contribution margin. and net operating income, of 11 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). Note: Round your percentage answers to 2 decimal places. Sales Net Operating Income Average Operating ROI% Assets $ 4,800,000 $ 368,000 S 790,000 48.58 $ 4,900,000 S 790,000 $ 5,000,000 S 790,000 $ 5,100,000 S 790,000 $ 5,200,000 $ 790,000 I $ 5,300,000 $ 790,000
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter12: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 12.4E
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