Hi Sky Enterprises Has Total Assets of $3 Million, a Debt

question 53

Multiple Choice

Hi Sky Enterprises has total assets of $3 million, a debt ratio of 30%, and an after-tax profit margin of 11.04% and sales of $2.5 million. What is Hi Sky's return on equity?

• A) 15%
• B) 35%
• C) 27%
• D) 13%

---

Definitions:

Direct Material Price Variance

The difference between the actual cost of direct materials and the planned (or standard) cost, often used for budgeting and cost control.

Materials Purchased

The raw materials and components bought by a company for use in the production of its goods or services.

Direct Labour Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, used to analyze labor cost efficiency.

Direct Labour Efficiency Variance

The difference between the budgeted amount of direct labor hours needed to produce a certain level of output and the actual hours used.