Compute the Profit Margin (Rounded to Nearest Percent)for the Tim

question 9

Multiple Choice

Compute the profit margin (rounded to nearest percent) for the Tim Tom investment center as shown below. $\begin{array}{lr}&\text { Tim Tom Subsidiary }\\\text { Total sales } & \$ 1,600 \\\text { Operating income } & \$ 180 \\\text { Average assets invested } & \$ 900 \\\text { Profit margin } & ? \\\text { Asset turnover } & ? \\\text { ROI } & ?\end{array}$

• A) 7%
• B) 9%
• C) 12%
• D) 18%

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Definitions:

Equivalent Units

A concept used in cost accounting to standardize heterogeneous units of production, making them quantitatively comparable.

Equivalent Units

Equivalent units are used in cost accounting to represent the amount of work done during a period, expressed in terms of fully completed units.

Direct Materials

These are the raw materials that are directly traceable and integral to the finished product in the manufacturing process.

Factory Overhead

All indirect costs associated with manufacturing, excluding direct materials and direct labor expenses.