Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the contribution format income statement for weste

The contribution format income statement for Westex, Inc., for its most recent period is given...

60.1K

Verified Solution

Question

Accounting

The contribution format income statement for Westex, Inc., for its most recent period is given below:

Total Unit
Sales $ 996,000 $ 49.80
Variable expenses 597,600 29.88
Contribution margin 398,400 19.92
Fixed expenses 316,400 15.82
Net operating income 82,000 4.10
Income taxes @ 40% 32,800 1.64
Net income $ 49,200 $ 2.46

The company had average operating assets of $503,000 during the period.

Required:
1.

Compute the companys return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. (Round your answer to 2 decimal places.)

For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the original ROI computed in (1) above.

2.

The company achieves a cost savings of $11,000 per period by using less costly materials. (Round your answers to 2 decimal places.)

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students