What Is the ROA of a Firm with $150,000 in Average

question 11

Multiple Choice

What is the ROA of a firm with $150,000 in average receivables, which represents 60 days sales, average assets of $750,000, and a profit margin of 9%?

• A)5.60%
• B)6.50%
• C)8.85%
• D)10.95%

Analyze the impact of special orders on operating income.

Determine the minimum acceptable price for special orders and product pricing.

Evaluate make or buy decisions using relevant costing.

Assess the financial implications of discontinuing a product or department.

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Definitions:

Per-unit Cost

The cost associated with producing or acquiring one unit of a product.

Factory Size

The physical dimensions or capacity of a manufacturing facility, which may influence its output, efficiency, and employment levels.

Average Costs

The total cost of production divided by the number of goods produced, used to calculate the cost on a per-unit basis.

Diseconomies of Scale

A condition in which a company or business grows so large that the costs per unit increase.