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 selling and administrative expense 195,500 operating income $55,750 less: income taxes (@ 40%) 22,300 net income $33,450 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. required: for east mullett manufacturing, calculate the following: 1. average operating assets $ 2. margin (round to two decimal places) % 3. turnover (round to two decimal places) 4. return on investment (round to one decimal place)

1.  $425,000

2. 10.49%

3. 1.25

4. 13.11%

Explanation:

The computations are shown below:

1. For Average operating assets

=  (Beginning Operating Assets + Ending Operating Assets) ÷ 2

= (390,000 + 460,000) ÷ 2

= $425,000

2. For margin:

= Net Operating Income ÷ Sales × 100

= $55,750 ÷ $531,250 × 100

= 10.49%

3. For turnover:

= Sales ÷ Average Operating Assets

= $531,250 ÷ $425,000

= 1.25

4. For return on investment:

= Net Operating Income ÷ Average Operating Assets

= $55,750 ÷ $425,000

= 13.11%

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o

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