The Following Financial Information Was Summarized from the Accounting Records

question 30

Multiple Choice

The following financial information was summarized from the accounting records of Globe Corporation for the current year ended December 31: $$\begin{array} { l r r r } & \text { Northern } & \text { Southern } & \text { Corporate } \\& \text { Division } & \text { Division } & \text { Total } \\\text { Cost of goods sold } & \$ 310,000 & \$ 175,000 & \\\text { Direct operating expenses } & 250,000 & 115,000 & \\\text { Net sales } & 600,000 & 410,000 & \\\text { Interest expense } & & & \$ 12,000 \\\text { General overhead } & && 101,000 \\\text { Income tax } & && 26,700\end{array}$$ ? The net income for Globe Corporation is:

• A) $59,000.
• B) $160,000.
• C) $19,400.
• D) $47,000.

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Definitions:

R&D Expenditures

Financial investments made in the research and development sector, aimed at fostering innovation, creating new products, improving existing products, or discovering new technologies.

Expected Rate of Return

The predicted yield that an investment will generate over a specified period, taking into account both the probability of gains and the possibility of losses.

Economic Efficiency

A broader term that occurs when all resources are allocated optimally to serve each individual or entity in the best way while minimizing waste and inefficiency.

ATC

Represents the average total cost, which is the sum of all production costs divided by the quantity of output produced, a crucial concept for understanding how firms should operate to cover their costs.