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%. 5. What is the turnover related to this year’s investment opportunity? (Round your answer to 1 decimal place.)
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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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
5. What is the turnover related to this year’s investment opportunity? (Round your answer to 1 decimal place.)
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