Question: Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the following income statement for the last year:

Sales                                              $980,000

Less: Variable expenses                       670,000

        Contribution margin                   $310,000

Less: Fixed expenses                          172,800

        Operating income                     $137,200

At the beginning of last year, Elway had $44,500 in operating assets. At the end of the year, Elway had $33,900 in operating assets.

Required: 1. Compute average operating assets.

2. Compute the margin and turnover ratios for last year.

3. Compute ROI.

4. Conceptual Connection: Briefly explain the meaning of ROI.

5. Conceptual Connection: Comment on why the ROI for Elway Company is relatively high (as compared to the lower ROI of a typical manufacturing company).