Answered

Explore Westonci.ca, the premier Q&A site that helps you find precise answers to your questions, no matter the topic. Get quick and reliable solutions to your questions from a community of experienced professionals on our platform. Explore comprehensive solutions to your questions from a wide range of professionals on our user-friendly platform.

Waterway Industries Recorded operating data for its Cheap division for the year. Waterway requires its return to be 10%. Sales $1600000 Controllable margin 88000 Total average assets 4400000 Fixed costs 100000 What is the ROI for the year

Sagot :

ayokenny2001

Answer:

See below

Explanation:

Given the above information, first we need to get the value of contribution margin , which is computed as;

Controllable margin = Contribution margin - Total direct fixed cost

$88,000 = Contribution margin - $100,000

Contribution margin = $88,000 + $100,000

Contribution margin = $188,000

Also,

Net income = Contribution margin - Total fixed expense

Net income = $188,000 - $100,000

Net income = $88,000

Return on investment = Net income ÷ Average operating assets

Return on investment = $88,000 ÷ $4,400,000

Return on investment = 2%

Therefore, the ROI for the year is 2%

We appreciate your time. Please come back anytime for the latest information and answers to your questions. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. We're dedicated to helping you find the answers you need at Westonci.ca. Don't hesitate to return for more.