Xulu Company Had the Following Income Statement for Last Year

question 64

Essay

Xulu Company had the following income statement for last year: $\begin{array}{lc}\text { Sales } & \$ 400,000 \\\text { Less: Cost of goods sold } & 220,000 \\\text { Gross profit } & \$ 180,000 \\\text { Less: Selling and administrative expense } & 80,000 \\\text { Operating income } & \$ 100,000\end{array}$ Beginning assets were $575,000,and ending assets were $625,000.
(Carry computations out to three decimal places.) A. $\quad$ What are the average operating assets?
B. $\quad$ What is the margin?
C. $\quad$ What is the turnover?
D. $\quad$ What is the ROI?

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Definitions:

Support Department Allocations

The process of distributing the costs of service departments to producing or operational departments based on their usage or consumption of services.

Minimum Return on Investment

The least amount of profit that an investor deems acceptable when investing in a project, often used to assess the viability of a potential investment.

Invested Assets

The total value of financial assets into which resources have been allocated with the expectation of earning a return.

Decentralized Units

Units or divisions of a larger organization that operate semi-independently, often with their own decision-making powers.