Answer the Following Questions Using the Information Below:
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question 63

Multiple Choice

Answer the following questions using the information below:
The top management at Munchie Company,a manufacturer of computer games,is attempting to recover from a flood that destroyed some of their accounting records.The main computer system was also severely damaged.The following information was salvaged:
$$\begin{array} { l r r r } & \text { Alpha Division } & \text { Beta Division } & \text { Gamma Division } \\\text { Sales } & \$ 2500000 & ( \mathrm { a } ) & \$ 1150000 \\\text { Net operating profit } & \$ 1500000 & \$ 650000 & \$ 575000 \\\text { Operating assets } & ( \mathrm { b } ) & ( \mathrm { c } ) & \$ 766667 \\\text { Return on investment } & 0.25 & 0.15 & \text { (d) } \\\text { Return on sales } & ( \mathrm { e } ) & 0.10 & 0.5 \\\text { Investment turnover } & ( \mathrm { f } ) & ( \mathrm { g } ) & 1.5\end{array}$$
-What is the value of the operating assets belonging to the Beta Division?

• A)$4 333 333
• B)$5 952 380
• C)$6 500 000
• D)$7 151 800

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Definitions:

Standard Costs

Predetermined costs for materials, labor, and overhead used as a benchmark to measure actual performance against.

Management

The process of planning, organizing, leading, and controlling an organization's resources to achieve its goals.

Stockholders

Stockholders, or shareholders, are individuals or entities that legally own one or more shares of stock in a joint-stock company, making them partial owners of that company.

Variable Factory Overhead Controllable Variance

The difference between actual variable overhead and the standard cost of variable overhead that management could control or influence.