Anguiano Inc The Company's Average Operating Assets Were $5,000,000

question 49

Multiple Choice

Anguiano Inc. reported the following results from last year's operations: $\begin{array}{lr}\text { Sales } & \$ 10,500,000 \\\text { Variable expenses } & 8,210,000 \\\text { Contribution margin } & 2,290,000 \\\text { Fixed expenses } & 1,555,000 \\\text { Net operating income } & \$ \quad 735,000 \\\end{array}$ The company's average operating assets were $5,000,000.
Last year's return on investment (ROI) was closest to:

• A) 7.0%
• B) 14.7%
• C) 45.8%
• D) 47.6%

---

Definitions:

Favorable Volume Variances

Differences between the expected volume of production or sales and the actual volume that lead to lower costs or higher profits than planned.

Production Capacity

The maximum output that an organization can produce in a given period under normal working conditions, considering available resources.

Work Stoppages

Occurrences when employees halt work, often due to labor disputes or strikes, affecting productivity and operations.

Direct Materials Price Variance

The difference between the actual cost of direct materials and the expected standard cost, indicating how well a company controls its material costs.