Thacker Company Has Two Regional Offices What Is the Return on Investment for the Melbourne Division

question 46

Multiple Choice

Thacker Company has two regional offices.The data for each follows:
$$\begin{array} { l r r } & \text { Sydney } & \text { Melbourne } \\\text { Revenues } & \$ 580000 & \$ 596000 \\\text { Operating assets } & 4800000 & 9000000 \\\text { Net operating profit } & 2016000 & 4860000\end{array}$$
What is the return on investment for the Melbourne Division?

• A)0.42
• B)0.54
• C)0.96
• D)4.12

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Definitions:

Additional Parts

Components or pieces beyond the basic requirements that are included in the manufacturing or assembly of a product.

Idle Capacity

Unused or underused production capability within a manufacturing facility, often resulting in inefficiency and lost potential revenue.

Full (Absorption) Cost

The total cost of a product that includes all direct and indirect costs, such as raw materials, labor, and overhead, required for its production.

Transfer Price

The price charged for goods or services transferred between divisions or units of the same company.