Miles Company Had Average Operating Assets of $4,000,000 and Sales

question 158

Multiple Choice

Miles Company had average operating assets of $4,000,000 and sales of $2,000,000 in 2010. If the controllable margin was $400,000, the ROI was

• A) 50%
• B) 40%
• C) 20%
• D) 10%

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Definitions:

Quantity Variance

The difference between actual quantity of material or labor used in production and the expected quantity, often leading to cost variations.

Direct Labor-Hours

The total hours worked by employees directly involved in the manufacturing process, often used as a basis for allocating labor and overhead costs.

Variable Overhead

Costs that change with the level of production or business activity, including materials and labor that fluctuate with output.

Efficiency Variance

A measure in cost accounting used to assess the efficiency with which inputs are converted into outputs, often looking at differences in labor or material usage.