Griffin Corp

question 30

Multiple Choice

Griffin Corp. is evaluating its Piquette division an investment center. The division has a $60000 controllable margin and $400000 of sales. How much will Griffin's average operating assets be when its return on investment is 10%?

• A) $600000
• B) $660000
• C) $400000
• D) $340000

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Definitions:

Variable Overhead

Costs that vary proportionally with the level of production or sales, such as utilities or commissions.

Fixed Overhead

The portion of overhead costs that remains constant regardless of the level of production or business activity.

Direct Labor

Labor costs that can be identified with a specific product or service.