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Problem 11-24 (Algo) Return on Investment (ROI) Analysis [LO11-1] The contribution format income statement for Huerra Company for last year is given below: The company had average operating assets of $500,000 during the year. Required: 1. Compute the company's margin, turnover, and return on investment (ROl) for the period. For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a resuit of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in (i) above. 2. Using Lean Production, the company is able to reduce the average level of inventory by $104,000. 3. The company achieves a cost savings of $7,000 per year by using less costly materials. 4. The company purchases machinery and equipment that increases average operating assets by $123,000. Sales remain unchanged: The new, more efficient equipment reduces production costs by $4.000 per yoar. 5. As a result of a more intense effort by sales people, sales are increased by 25%; operating assets remain unchanged, 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $17.000 is scrapped and written off as a loss. thereby lowering net operating income. 7. At the beginning of the year, the company uses $184,000 of cash (received on accounts recelvable) to repurchase some of ats common stock. Exercise 12-3 (Algo) Measures of Internal Business Process Performance [LO12-3] Management of Mittel Company would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of operations during the current year the following data were reported: Required: 1. Compute the throughput time. (Round your answer to 1 decimal place.) 2. Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your percentage answer to nearest whole percent) 3. What percentage of the throughput time was spent in non-value-added activities? (Round your percentage answer to nearest whole percent.) 4. Compute the delivery cycle time. (Round your intermediate calculations and final answer to 1 decimal place.) 5. If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Do not round intermediate calculations. Round your percentage answer to 1 decimal place.)

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