\table[[, Sales, \table [[Net Operating], [Income]],, \table [[erage], [rating], [sets ]], ROI], [$, 4, 300, 000, $, 272, 000, $, 790, 000, %Posters.com is a small Internet retailer of high-quality posters. The company has $790, 000 in operating assets and fixed expenses of $158,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4,800,000 per year. The company's contribution margin ratio is 10%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 10 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?

\table[[, Sales, \table [[Net Operating], [Income]],, \table [[erage], [rating], [sets ]], ROI], [$, 4, 300, 000, $, 272, 000, $, 790, 000, %Posters.com is a small Internet retailer of high-quality posters. The company has $790, 000 in operating assets and fixed expenses of $158,000 per year. With this level of operating assets and fixed expenses, the company can support sales of up to $4,800,000 per year. The company's contribution margin ratio is 10%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 10 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?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 29E

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