The Machining Division Has a Capacity of 2,000 Units

question 29

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
Return on Investment is:

• A)The same as residual income
• B)Net operating income divided by average operating assets
• C)A nonfinancial measure of performance
• D)Net operating income minus average operating assets X cost of capital

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