Reference: 12-02
the Following Data Are Available for the South

question 73

Multiple Choice

Reference: 12-02
The following data are available for the South Division of Redride Products, Inc. and the single product it makes: $$\begin{array} { | l | l | } \hline \text { Unit selling price } & \$ 20 \\\hline \text { Variable cost per unit } & \$ 12 \\\hline \text { Annual fixed costs } & \$ 280,000 \\\hline \text { Average operating assets } & \$ 1,500,000 \\\hline\end{array}$$
-Delmar Corporation is considering the use of residual income as a measure of the performance of its divisions. What major disadvantage of this method should the company consider before deciding to institute it?

• A)Residual income does not measure how effectively the division manager controls costs.
• B)Opportunities may be undertaken which will decrease the overall return on investment.
• C)The minimum required rate of return may eliminate desirable opportunities from consideration.
• D)This method does not make allowance for difference in the size of compared divisions.

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Definitions:

ToString Method

The toString method in Java is used to create a String representation of an object, often overridden in classes to provide a meaningful description of an object.

Equals Method

A method in Java used to compare the contents of two objects for equality, rather than comparing their references.

GetName

Typically a method in programming that returns the name of an object or variable.

This Parameter

The "this" parameter in programming refers to a variable within an object method that symbolizes the object itself, used to access members of the object.