Reference: 12-03
the Axle Division of LaBate Company Makes and Sells

question 7

Multiple Choice

Reference: 12-03
The Axle Division of LaBate Company makes and sells only one product. Annual data on the Axle Division's single product follow: $$\begin{array} { | l | l | } \hline \text { Unit selling price } & \$ 50 \\\hline \text { Unit variable cost } & \$ 30 \\\hline \text { Total fixed costs } & \$ 200,000 \\\hline \text { Average operating assets } & \$ 750,000 \\\hline \text { Minimum required rate of return } & 12 \% \\\hline\end{array}$$
-If the Axle Division sells 15,000 units per year, the residual income should be

• A)$100,000.
• B)$50,000.
• C)$10,000.
• D)$30,000.

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Definitions:

Formal Operational Stage

A stage in Piaget's theory of cognitive development where individuals develop the ability to think abstractly and logically.

Cognitive Development

Refers to the process through which individuals acquire and evolve their thinking skills, problem-solving abilities, and knowledge over time.

Logical Plan

A structured and reasoned approach to solving a problem or achieving a goal.

Concrete Operational Stage

A stage in Piaget's theory of cognitive development where children gain the ability to think logically about concrete events.