Global Electronics Company the Computer Division of Global Electronics Company

question 61

Multiple Choice

Global Electronics Company The Computer Division of Global Electronics Company had the following financial data for the year:
Refer to Global Electronics Company.If expenses increased by $20,000 in the Computer Division,

• A)return on investment would decrease.
• B)residual income would increase.
• C)the target rate of return would decrease.
• D)asset turnover would decrease.

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Definitions:

Goods Sold

Refers to the products that have been sold and delivered to customers during a specific period.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products, calculated at the beginning of the period based on estimated costs and activity levels.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the manufacturing process or providing a service.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, indirect labor, and materials.