Westerville Company reported the following results from last year’s operations: Sales $ 1,000,000 Variable expenses 300,000 Contribution margin 700,000 Fixed expenses 500,000 Net operating income $ 200,000 Average operating assets $ 625,000
Westerville Company reported the following results from last year’s operations: Sales $ 1,000,000 Variable expenses 300,000 Contribution margin 700,000 Fixed expenses 500,000 Net operating income $ 200,000 Average operating assets $ 625,000
Chapter2: Financial Statements, Cash Flow, And Taxes
Section: Chapter Questions
Problem 14SP
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The Foundational 15 (Static) [LO10-1, LO10-2]
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Westerville Company reported the following results from last year’s operations:
Sales | $ 1,000,000 |
---|---|
Variable expenses | 300,000 |
Contribution margin | 700,000 |
Fixed expenses | 500,000 |
Net operating income | $ 200,000 |
Average operating assets | $ 625,000 |
At the beginning of this year, the company has a $120,000 investment opportunity with the following cost and revenue characteristics:
Sales | $ 200,000 | |
---|---|---|
Contribution margin ratio | 60 | % of sales |
Fixed expenses | $ 90,000 |
The company’s minimum required
Foundational 10-11 (Static)
11. What is last year’s residual income?
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