# Accounting – Exercise 12-19

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2.

Cornerstone Exercise 12-13 (Algorithmic)
Calculating Average Operating Assets, Margin, Turnover, and Return on Investment

East Mullett Manufacturing earned operating income last year as shown in the following income statement:

Sales

\$531,250

Cost of goods sold

280,000

Gross margin

\$251,250

181,700

Operating income

\$69,550

At the beginning of the year, the value of operating assets was \$390,000. At the end of the year, the value of operating assets was \$460,000.

For East Mullett Manufacturing, calculate the following:

1. Average operating assets

\$   _________________

2.  Margin (round to the nearest whole percent)

_________________

%

3.

Turnover (round to two decimal places)

_________________

4.

Return on investment

_________________

%

3.

4.

 eBookeBookeBookeBook Exercise 12-21 (Algorithmic) Park Company provided the following income statement for last year: Sales \$70,000 Less: Variable expenses 56,000 Contribution margin \$14,000 Less: Fixed expenses 19,200 Operating income \$-5,200 At the beginning of last year, Park had \$38,650 in operating assets. At the end of the year, Park had \$41,350 in operating assets. Compute ROI. Do not round interim calculations, but do round your final answer to two decimal places. If required, use a minus sign to indicate a negative ROI. ROI =   _________________   %

5.

 eBookeBookeBookeBook Exercise 12-22 Return on Investment, Margin, Turnover Links to learning objectives referenced by this question can be accessed in the “Additional Resources” drop-down menu above. Data follow for the Construction Division of D. Jack Inc.: Round all answers to two decimal places. 1.  Compute the margin (as a percent) and turnover ratios for each year.      Year 1    Year 2 Margin:   _________________   %   _________________   % Turnover:   _________________     _________________   2.  Compute the ROI as a percent for the Construction Division for each year. ROI year 1   _________________   % ROI year 2   _________________   %
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