Determine the Dollar Amount of Net Profit for a Venture

question 64

Multiple Choice

Determine the dollar amount of net profit for a venture with the following financial information: revenues = $500,000; return on assets = 20%; and asset turnover = 2.00 times.

• A) $10,000
• B) $25,000
• C) $50,000
• D) $60,000
• E) $75,000

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Definitions:

Modern Manufacturing Environment

Refers to the current state of manufacturing characterized by advanced technologies, lean production methods, and increased emphasis on sustainability.

Highly Automated System

A system incorporating advanced technologies to minimize human intervention in its operations.

Step-Down Method

A cost allocation method used in accounting to allocate indirect costs to different departments or products sequentially.

Allocate Total Support

The process of assigning the full amount of indirect costs or overheads to specific activities, departments, or products.