Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 1,400,000 680,000 720,000 440,000 $ 280,000 $ 875,000 $ 480,000 $ 336,000 The company's minimum required rate of return is 15%. Residual income 80% of sales 13. If the company pursues the investment oppo unity and otherwise performs the same as last year, what residual income will it this year?

Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 1,400,000 680,000 720,000 440,000 $ 280,000 $ 875,000 $ 480,000 $ 336,000 The company's minimum required rate of return is 15%. Residual income 80% of sales 13. If the company pursues the investment oppo unity and otherwise performs the same as last year, what residual income will it this year?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 27E: Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the...

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Required information [The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets ROI At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: Sales $ 1,800,000 435,000 1,365,000 1,005,000 $360,000 $ 1,200,000 $360,000 $ 216,000 The company's minimum required rate of return is 10% Contribution margin ratio Fixed expenses 70 of sales. 6. What is the ROI related to this year's investment opportunity?
Margin, Turnover, Return on Investment, Average OperatingAssetsElway Company provided the following income statement for the last year:Sales $1,040,000,000Less: Variable expenses 700,250,000Contribution margin $ 339,750,000Less: Fixed expenses 183,750,000Operating income $ 156,000,000At the beginning of last year, Elway had $28,300,000 in operating assets. At the end of the year,Elway had $23,700,000 in operating assets.Required:1. Compute average operating assets.2. Compute the margin and turnover ratios for last year. (Note: Round the answer formargin ratio to two decimal places.)3. Compute ROI. (Note: Round answer to two decimal places.)4. CONCEPTUAL CONNECTION Briefly explain the meaning of ROI.5. CONCEPTUAL CONNECTION Comment on why the ROI for Elway Company isrelatively high (as compared to the lower ROI of a typical manufacturing company).
i Requlred Informatlon The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: $ 2,300,000 Contribution margin Fixed expenses 1,170,000 Net operating income Average operating assets S1,437,500 At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics: Sales $ 460,000 50% of sales Contribution margin ratio Fixed expenses, $ 161,000 The company's minimum required rate of return is 15%. 8. If the company pursues the investment opportunity and otherwise performs the same as last year, what turnover will it earn this year? (Round your answer to 2 decimal places.) < Prev Next 15. here to search, 近。 F4 F5 F7 F8 F12 $ & V 4.
Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses $ 1,750, 000 520,000 1, 230, 000 880, 000 Net operating income %24 350, 000 Average operating assets 24 875, 000 At the beginning of this year, the company has a $200,000 investment opportunity with the following cost and revenue characteristics: Sales $ 320, 000 Contribution margin ratio Fixed expenses 60% of sales $ 128, 000 The company's minimum required rate of return is 20%. 4. What is the margin related to this year's investment opportunity? Margin Drov
[The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets At the beginning of this year, the company has a $162,500 investment opportunity with the following cost and revenue characteristics: Sales $ 1,300,000 440,000 860,000 600,000 $ 260,000 $ 812,500 Contribution margin ratio Fixed expenses $ 260,000 80 % of sales $ 182,000 The company's minimum required rate of return is 15%. 2. What is last year's turnover? Note: Round your answer to 1 decimal place.