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https://newcorrectmheducation.com/flowcorrect.html ter 11 Graded Exercises Saved Help Save & Exit Submit Check my work Posters.com is a small Internet retailer of high-quality posters. The company has $740,000 in operating assets and fixed expenses of $158,000 per year. With thi year. The company's contribution margin ratio is 10%, which means that an additional dollar of sales results in additional contribution margin, and net operating income, of 10 cents. s level of operating assets and fixed expenses, the company can support sales of up to $4,600.000 per Required: 1. Complete the following table showing the relation between sales and return on investment (RO 2. What happens to the company's return on investment (ROI) as sales increase? ook rint Complete this question by entering your answers in the tabs belovw Required 1 Required 2 Complete the following table showing the relation between sales and return on investment (ROI). (Round your percentage answers to 2 decimal places.) Sales Net Operating Operating ROI Assets $4,100,000 252,000 740,000 $4,200,000 $4.300,000 $4.400,000 $4,500,000 $4,600,000 S 740,000 S 740,000 S 740,000 S 740,000 $ 740,000

Explanation / Answer

1-

sales

net operating income =(contribution margin-fixed cost)

average operating assets

ROI = net operating profit/average operating assets

4100000

252000

740000

34.05%

4200000

262000

740000

35.41%

4300000

272000

740000

36.76%

4400000

282000

740000

38.11%

4500000

292000

740000

39.46%

4600000

302000

740000

40.81%

2-

As the sales will increase ROI will also increase to a maximum level of sales at a fixed cost of 158000

sales

contribution margin 10% of sales

less fixed cost

net operating income =(contribution margin-fixed cost)

4100000

410000

158000

252000

4200000

420000

158000

262000

4300000

430000

158000

272000

4400000

440000

158000

282000

4500000

450000

158000

292000

4600000

460000

158000

302000

1-

sales

net operating income =(contribution margin-fixed cost)

average operating assets

ROI = net operating profit/average operating assets

4100000

252000

740000

34.05%

4200000

262000

740000

35.41%

4300000

272000

740000

36.76%

4400000

282000

740000

38.11%

4500000

292000

740000

39.46%

4600000

302000

740000

40.81%

2-

As the sales will increase ROI will also increase to a maximum level of sales at a fixed cost of 158000

sales

contribution margin 10% of sales

less fixed cost

net operating income =(contribution margin-fixed cost)

4100000

410000

158000

252000

4200000

420000

158000

262000

4300000

430000

158000

272000

4400000

440000

158000

282000

4500000

450000

158000

292000

4600000

460000

158000

302000

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