Part 2 Company

A B C
Sales $1,000,000 $300,000
Operating Income $140,000 $42,000
Average Operating Assets $500,000 $600,000
Margin 4%
Turnover 2
Return on Investment 7%

given
Part 1
Part 1
New Line
Sales
Variable expenses
Contribution margin
Fixed expenses
Operating income

Sales
Operating income
Operating assets
Margin
Turnover
ROI

Part 2

Part 3

Part 4a

Part 4b
$21,000,000 Sales
$13,400,000 var Exp
$7,600,000 CM
$5,920,000 Fix Exp
$1,680,000 Op Inc
$5,250,000 Div op assets
18% ROI
$3,000,000 Investments
$9,000,000 Sales new prod line
65% Var Exp (% of sales)
 $2,520,000 Fix Exp new prod
15% ROI Part 4

$21,000,000 Sales
$13,400,000 var Exp
$7,600,000 CM
$5,920,000 Fix Exp
$1,680,000 Op Inc
$5,250,000 Div op assets
18% ROI
$3,000,000 Investments
$9,000,000 Sales new prod line
65% Var Exp (% of sales)
$2,520,000 Fix Exp new prod
15% ROI Part 4
Part 1

Part 2 & 3

Units sold
Sales
Less variable expense
Contribution margin
Less fixed expenses
Operating income

Total assets

Margin
Turnover
ROI
 14% ROI
$700,000 Avg Op Assets
$5 Sell/unit
$3 Var/unit
$462,000 Fix Costs
300,000 Capacity

14% ROI
$700,000 Avg Op Assets
$5 Sell/unit
$3 Var/unit
$462,000 Fix Costs
300,000 Capacity
4% ROI
20,000 S Drop/yr
$50,000 Op Inc/yr