Express Productions Provides the Following Information Calculate the Return on Investment

question 25

Multiple Choice

Express Productions provides the following information.
$$\begin{array} { l r } \text { Sales } & \$ 1370000 \\\text { Operating profit } & 150000 \\\text { Average operating assets } & 1200000 \\\text { Shareholders' equity } & 1000000 \\\text { Minimum required rate of return } & 6 \%\end{array}$$
Calculate the return on investment.

• A) 6.5%
• B) 12.5%
• C) 11.0%
• D) 15.0%

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Definitions:

Materials Price Variance

The difference between the actual cost of materials used in production and the standard or expected cost of those materials.

Kilograms

A metric unit of mass equivalent to one thousand grams, commonly used worldwide for measuring weight of objects.

Labor Efficiency Variance

The difference between the actual number of labor hours used in production and the standard hours expected for that level of production, multiplied by the standard hourly labor rate.

Particular Product

A specific item or commodity that is produced or sold by a business.