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Margin, Turnover, ROI question?
question 1
Margin X Asset Turnover= ROI
Sales=200,000
Avg operating assets=100,000
net operating income=20,000
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question 2: sell or process further:
A company discovers that it can change its product whizzo into bizzo! the company can sell unlimited quantities of both products:
Information
Selling price of whizzo 5.00
selling price of bizzo 7.50
Whizzo cost per unit: 3.00
additional cost to convert 2.00
A. Should the company change whizzo into bizzo? why?
B. What would be your answer if the company could sell only 500 units of whizzo or 370 units of bizzo?
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1 Answer
- adiwsusantoLv 61 decade agoFavourite answer
I don't know what's the question on Q1.
Q2 answer for A is YES. Because Bizzo provides higher CM/unit
Q2 B is NO because of the sales quantity different, the TOTAL CM for Whizzo is actually higher than Bizzo.
Cheers...
