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

question 72

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 16,000 units per year, the return on investment should be

• A)12%.
• B)15%.
• C)18%.
• D)16%.

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