Rhein Manufacturing Recorded Operating Data for Its Auto Accessories Division

question 136

Multiple Choice

Rhein Manufacturing recorded operating data for its auto accessories division for the year. $$\begin{array} { l r } \text { Sales } & \$ 750,000 \\\text { Contribution margin } & 150,000 \\\text { Total direct fixed costs } & 90,000 \\\text { Average total operating assets } & 400,000\end{array}$$ How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30,000, assuming fixed costs are held constant?

• A)45.0%
• B)22.5%
• C)15.0%
• D)12.0%

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Definitions:

Chapter 7 Bankruptcy

A process under federal law designed to eliminate unsecured debts and liquidate non-exempt assets to pay creditors.

Chapter 7

This typically refers to a chapter of the U.S. Bankruptcy Code dealing with liquidation, where a debtor's assets are sold to pay off creditors.

Secured Party

An individual or entity that has been given a security interest in the property of a debtor as collateral for a loan or obligation.

Secured Property

is assets or property used as collateral to secure a loan, ensuring the lender can recover the loan through repossession if necessary.