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7 April, 23:42

Marigold Corp. recorded operating data for its auto accessories division for the year. Sales $610000 Contribution margin 140000 Total direct fixed costs 90000 Average total operating assets 200000 How much is ROI for the year if management is able to identify a way to improve the contribution margin by $10000, assuming fixed costs are held constant? 75% 30% 25% 15%

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  1. 8 April, 03:10
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    The ROI is 30%

    Explanation:

    New contribution margin = old contribution margin + increase

    = 140.000 + 10.000

    = 150.000

    Net Income = contribution margin - total fixed expense

    = 150.000 - 90.000

    = 60.000

    ROI = Net income / average operating assets

    = 60.000/200.000

    =30%
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