If a Retailer Has a Return on Assets of 15

question 30

Multiple Choice

If a retailer has a return on assets of 15 percent and a net profit margin of 3 percent,then its rate of asset turnover is:

• A) .20 times.
• B) 5.0 times.
• C) 15.0 times.
• D) 30.0 times.
• E) 60.0 times.

---

Definitions:

Static Budget

A budget based on a set level of activity and does not change in response to changes in business activity levels during the budget period.

Overhead Costs

Indirect costs incurred in the production process or in the provision of services that cannot be directly tied to a specific product or service.

Overhead Allocation

The process of distributing indirect costs to cost objects such as products, services, or business units.

Variable Overhead

Costs that vary indirectly with production volume, such as utilities or indirect materials.