The contribution format income statement for Huerra Company for last year is given below: TotalUnitSales$998,000$49.90Variable expenses 598,800 29.94Contribution margin 399,200 19.96Fixed expenses 321,200 16.06Net operating income 78,000 3.90Income taxes @ 40% 31,200 1.56Net income$46,800$2.34 The company had average operating assets of $508,000 during the year.3. The company achieves a cost savings of $6,000 per year by using less costly materials.

Return on investment: It is used to measure the efficiency of the investment of the organisation.

Answered: The contribution format income…

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Chapter7: Stocks (equity) - Characterstics And Valuation

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Problem 19PROB

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The contribution format income statement for Huerra Company for last year is given below:

	Total	Unit
Sales	$	998,000	$	49.90
Variable expenses		598,800		29.94
Contribution margin		399,200		19.96
Fixed expenses		321,200		16.06
Net operating income		78,000		3.90
Income taxes @ 40%		31,200		1.56
Net income	$	46,800	$	2.34

The company had average operating assets of $508,000 during the year.

3. The company achieves a cost savings of $6,000 per year by using less costly materials.

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