Wellington Enterprises reported the following results from last year's operations: Sales $1,800,000 Variable expenses $720,000 Contribution margin $1,080,000 Fixed expenses $750,000 Net operating income $330,000 Average operating assets $1,200,000 This year, the company has a $250,000 investment opportunity with the following cost and revenue characteristics: Sales $350,000 Contribution margin ratio 58% of sales Fixed expenses $140,000 The company's minimum required rate of return is 10%. What is the margin % related to this year's investment opportunity?

Wellington Enterprises reported the following results from last year's operations: Sales $1,800,000 Variable expenses $720,000 Contribution margin $1,080,000 Fixed expenses $750,000 Net operating income $330,000 Average operating assets $1,200,000 This year, the company has a $250,000 investment opportunity with the following cost and revenue characteristics: Sales $350,000 Contribution margin ratio 58% of sales Fixed expenses $140,000 The company's minimum required rate of return is 10%. What is the margin % related to this year's investment opportunity?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 5EA: During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of...

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Westerville Company reported the following results from last year’s operations: Sales $ 1,500,000 Variable expenses 500,000 Contribution margin 1,000,000 Fixed expenses 700,000 Net operating income $ 300,000 Average operating assets $ 1,000,000 At the beginning of this year, the company has a $200,000 investment opportunity with the following cost and revenue characteristics: Sales $ 300,000 Contribution margin ratio 60 % of sales Fixed expenses $ 132,000 The company’s minimum required rate of return is 10%. Required: 1. What is last year’s margin?
Westerville Company reported the following results from last year’s operations: Sales $ 1,500,000 Variable expenses 500,000 Contribution margin 1,000,000 Fixed expenses 700,000 Net operating income $ 300,000 Average operating assets $ 1,000,000 At the beginning of this year, the company has a $200,000 investment opportunity with the following cost and revenue characteristics: Sales $ 300,000 Contribution margin ratio 60 % of sales Fixed expenses $ 132,000 The company’s minimum required rate of return is 10%. What is the residual income of this year’s investment opportunity? What is last year’s residual income?
Westerville Company reported the following results from last year’s operations: Sales $ 1,800,000 Variable expenses 740,000 Contribution margin 1,060,000 Fixed expenses 700,000 Net operating income $ 360,000 Average operating assets $ 1,200,000 At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics: Sales $ 600,000 Contribution margin ratio 60 % of sales Fixed expenses $ 288,000 The company’s minimum required rate of return is 10%. 5. What is the turnover related to this year’s investment opportunity? (Round your answer to 1 decimal place.)
Westerville Company reported the following results from last year’s operations: Sales $ 1,800,000 Variable expenses 740,000 Contribution margin 1,060,000 Fixed expenses 700,000 Net operating income $ 360,000 Average operating assets $ 1,200,000 At the beginning of this year, the company has a $400,000 investment opportunity with the following cost and revenue characteristics: Sales $ 600,000 Contribution margin ratio 60 % of sales Fixed expenses $ 288,000 The company’s minimum required rate of return is 10%. 2. What is last year’s turnover? (Round your answer to 1 decimal place.) 3. What is last year’s return on investment (ROI)? (Round your intermediate calculations to 1 decimal place.) 4. What is the margin related to this year’s investment opportunity? 5. What is the turnover related to this year’s investment opportunity? (Round your answer to 1 decimal place.)
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