-What Is Company A's Return on Investment (ROI)?
A) 4

question 62

Multiple Choice

$\begin{array}{l}\text { The following information is available on Company A: }\\\begin{array} { | l | r | } \hline \text { Sales } & \$ 900,000 \\\hline \text { Operating Income } & \$ 36,000 \\\hline \text { Shareholders' Equity } & \$ 100,000 \\\hline \text { Average Operating Assets } & \$ 180,000 \\\hline \text { Minimum Required Rate of Return } & 15 \% \\\hline\end{array}\end{array}$
-What is Company A's return on investment (ROI) ?

• A) 4%.
• B) 15%.
• C) 20%.
• D) 36%.

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Definitions:

Casting Department

A specific section within a manufacturing facility where the process of casting—shaping material by pouring it into a mold and allowing it to solidify—is performed.

Machine-Hour

A unit of measure for the operational time of machinery, critical for calculating production costs and efficiency in a manufacturing context. This is essential in allocating costs based on the usage duration of machinery.

Predetermined Overhead Rate

A rate calculated before the period begins, used to allocate overhead costs to products or services based on a certain activity base.

Labor-Hours

Labor-Hours measure the total hours worked by employees, typically within a specified period for payroll or productivity analysis.