Use the Information Below to Answer the Following Question(s)

question 4

Multiple Choice

Use the information below to answer the following question(s) :
Assume the Cell Phone Division of the First Electronics Corporation had the following results last year (in thousands) . Management's target rate of return is 10% and the weighted average cost of capital is 7%. Its effective tax rate is 30%.

-What is the First Electronics Corporation cell phone division's asset turnover?

• A) 2.0
• B) 3.3
• C) 4.0
• D) 6.7

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Definitions:

Equivalent Units

A concept used in cost accounting to convert partially completed goods into a number of complete units of output, allowing for a consistent measure of output.

Conversion Cost

Comprises expenses related to transforming inputs into finished outputs, specifically through labor and overhead costs, essential in manufacturing processes.

Direct Labor

The labor or workforce directly involved in the production process of goods or services, whose costs can be directly attributed to the products being manufactured.