Youns Inc. reported the following results from last year's operations: Sales $ 10,500,000 Variable expenses 6,610,000 Contribution margin 3,890,000 Fixed expenses 3,260,000 Net operating income $ 630,000 The company's average operating assets were $5,000,000. At the beginning of this year, the company has a $1,400,000 investment opportunity that involves sales of $2,800,000, fixed expenses of $616,000, and a contribution margin ratio of 30% of sales. If the company pursues the investment opportunity and otherwise performs the same as last year, the combined turnover for the entire company will be closest to:

Question

Joyce Solomon

Business

26 June, 11:46

Youns Inc. reported the following results from last year's operations: Sales $ 10,500,000 Variable expenses 6,610,000 Contribution margin 3,890,000 Fixed expenses 3,260,000 Net operating income $ 630,000 The company's average operating assets were $5,000,000. At the beginning of this year, the company has a $1,400,000 investment opportunity that involves sales of $2,800,000, fixed expenses of $616,000, and a contribution margin ratio of 30% of sales. If the company pursues the investment opportunity and otherwise performs the same as last year, the combined turnover for the entire company will be closest to:

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Answers (1)

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Beaux · Answer 1

Combined turnover = $13,300,000.

Explanation:

The combined turnover is the sum of the turnover for last year and the turnover after the investment opportunity is taken.

Combined turnover = turnover last year + turnover from the new investment opportunity.

= 10,500,000 + 2,800,000

= $13,300,000