The Dry Wall Division Reports the Following Operating Data for the Past

question 82

Multiple Choice

The Dry Wall Division reports the following operating data for the past two years:
$$\begin{array} { | l | r | r | } \hline \text { Margin } & \text { Year 1 } & \text { Year 2 } \\\hline \text { Turnourer } & 16 \% & ? \\\hline \text { Average operating assets } & 2.5 & 2 \\\hline \text { Net operating income } & \$ 40,000 & ? \\\hline \text { Stockholders' equity } & \$ 80,000 & \$ 125,000 \\\hline \text { Sales } & ? & ? \\\hline\end{array}$$ The return on investment at the Dry Wall Division was exactly the same in Year 1 and Year 2.Net operating income in Year 2 amounted to:

• A) $60,000.
• B) $50,000.
• C) $40,000.
• D) $35,000.

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Definitions:

Total Period Costs

All expenses incurred by a business that are not directly tied to the production of goods or services within a specific period.

Cost of Work

The total expense incurred in producing goods or services, including materials, labor, and overhead costs.

Cost of Goods Manufactured

The total cost incurred to manufacture products, including direct labor, direct materials, and manufacturing overhead, during a specific period.

Financial Accounting

The field of accounting focused on the summary, analysis, and reporting of financial transactions pertaining to a business to external entities.