Rex Company's Sales Last Year Totaled $150,000 and Its Return

question 2

Multiple Choice

Rex Company's sales last year totaled $150,000 and its return on investment (ROI) was 12%. If the company's turnover was 3, then its net operating income for the year must have been:

• A) $6,000.
• B) $2,000.
• C) $18,000.
• D) it is impossible to determine from the data given.

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Definitions:

Eliminating Product

The process of discontinuing the production and sale of a product, typically due to poor sales, profitability, or strategic realignment.

Financial Advantage

The benefit gained from making a financially prudent decision that leads to wealth accumulation, cost savings, or any other monetary gain.

Dropping Product

The decision to discontinue the production and sale of a product line or item, typically due to it not meeting financial or strategic goals.

Contribution Margin

The amount remaining from sales revenues after all variable expenses are paid, contributing towards covering fixed costs and profit.