Rhein Manufacturing recorded operating data for its auto accessories division for the year. Sales= $750,000; Contribution margin= 150,000; Total direct fixed costs= 90,000;
Average total operating assets= 400,000; How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30,000, assuming fixed costs are held constant? The answer is 22.5%. How do you get this answer?