The Management of Pasama Inc

question 145

Multiple Choice

The management of Pasama Inc. is evaluating the three segments of the company. Given the data below, which of the following statements is true regarding segment return on assets?

• A) Segment Africa has the highest operating income and the highest return on assets
• B) Segment Belgium has the highest operating income and the highest return on assets
• C) Segment Canada has the highest operating income and the highest return on assets
• D) Segment Canada has the highest return on assets and Segment Africa has the lowest return on assets
• E) Segment Belgium has a higher return on assets than Segment Canada

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Definitions:

Actual Costs

Actual costs are the expenses that have been incurred or the true amount of money spent on a project, product, or activity.

Fixed Overhead Budget Variance

The difference between the budgeted fixed overhead costs and the actual fixed overhead incurred.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums, providing predictability to a business's expenses.

Labour Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain level of output, valued at the standard labour rate.