The Machining Division Has a Capacity of 2,000 Units

question 41

Multiple Choice

The Machining Division has a capacity of 2,000 units. Its sales and cost data are: Selling price per unit $100
Variable manufacturing costs per unit $25
Variable administrative costs per unit $5
Total fixed manufacturing overhead $20,000
Total fixed administrative costs $5,000
Residual income is:

• A)The same as return on investment
• B)A nonfinancial measure of performance
• C)Net operating income minus a required rate of return X average operating assets
• D)Sales divided by net operating income

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Definitions:

Positively Correlated

A statistical relationship where two variables move in the same direction; as one increases, the other tends to increase as well.

Midterm

A type of examination or assessment typically given halfway through an academic term to measure students' understanding and knowledge in a specific course.

Final Exam

A comprehensive test given at the end of an academic course or term, assessing a student's understanding and knowledge of the covered material.

Mode

The most frequently occurring value in a given set of data.