Following Is the Information Listed Below for Carter State Bank

question 18

Multiple Choice

Following is the information listed below for Carter State Bank.What is the bank's net profit margin? $\begin{array} { l l } \text { Net income } & \$ 55 \text { million } \\\text { Total operating revenue } & \$ 650 \text { million } \\\text { Total assets } & \$ 4,055 \text { million } \\\text { Total equity capital } & \$ 350 \text { million }\end{array}$

• A)8.46 percent
• B)16.03 percent
• C)15.71 percent
• D)1.36 percent
• E)None of the options is correct

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Definitions:

Fixed Manufacturing Overhead

Indirect manufacturing costs that do not vary with the level of production, such as salaries of managers and depreciation of factory equipment.

Variable Manufacturing Overhead

Costs associated with manufacturing that vary directly with the levels of production output, such as raw materials and labor.

Overhead Applied

The allocated manufacturing overhead costs to individual products or jobs based on a predetermined rate.

Predetermined Overhead Rate

A rate calculated before the year begins, used to allocate estimated overhead costs to products based on a chosen activity base.