Anguiano Incorporated Reported the Following Results from Last Year's Operations

question 119

Multiple Choice

Anguiano Incorporated reported the following results from last year's operations: The company's average operating assets were $5,000,000. Last year's return on investment (ROI) was closest to:

• A) 7.0%
• B) 14.7%
• C) 45.8%
• D) 47.6%

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Definitions:

Direct Labor Hours

Direct labor hours represent the total hours worked by employees directly involved in producing goods or providing services in a manufacturing or service setting.

Overhead Costs

Expenses related to the operation of a business that cannot be directly tied to a specific product or service.

Plantwide Overhead Rate

Plantwide overhead rate is a single rate used to allocate all of a plant’s manufacturing overhead costs to its production activities, regardless of the department in which they occur.

Direct Labor Hour

A measure of the labor directly involved in manufacturing a product or delivering a service, often used in costing and budgeting.