The contribution format income statement for HuerraCompany for last year is given below:The company had average operating assets of $507,000during the year.Required:1. Compute the companys return on investment (ROI) forthe period using the ROI formula stated in terms of marginand turnover.For each of the following questions, indicate whether themargin and turnover will increase, decrease, or remainunchanged as a result of the events described, and thencompute the new ROI figure. Consider each questionseparately, starting in each case from the data used tocompute the original ROI in (1) above.2. Using Lean Production, the company is able to reduce theaverage level of inventory by $107,000. (The released fundsare used to pay off short-term creditors.)3. The company achieves a cost savings of $15,000 per yearby using less costly materials.4. The company issues bonds and uses the proceeds to�
