A202 Fall2010 Quiz _5 version Accounting

A202 Fall2010 Quiz _5 version Accounting - A202 Fall2010...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
A202 Fall2010 Quiz #5 version A Student: ___________________________________________________________________________ 1. Which of the following will not result in an increase in return on investment (ROI), assuming other factors remain the same? A. A reduction in expenses. B. An increase in net operating income. C. An increase in operating assets. D. An increase in sales. 2. Lyons Company consists of two divisions, A and B. Lyons Company reported a contribution margin of $50,000 for Division A, and had a contribution margin ratio of 30% in Division B, when sales in Division B were $200,000. Net operating income for the company was $25,000 and traceable fixed expenses were $40,000. Lyons Company's common fixed expenses were: A. $85,000 B. $70,000 C. $45,000 D. $40,000 3. In January, the Universal Solutions Division of Zima Corporation had average operating assets of $520,000 and net operating income of $97,600. The company uses residual income, with a minimum required rate of return of 18%, to evaluate the performance of its divisions. What was the Universal Solutions Division's residual income in January? A. $4,000 B. ($4,000) C. $17,568 D. ($17,568)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Licuado Juice Company has four product lines; Orange, Tomato, Carrot, and Grape. Shown below is last year's income statement segmented by product line: Net operating income last year for Licuado Company as a whole was $24,800. 4. If the Carrot product line would have been dropped at the beginning of last year, how would this have changed the net operating income of Licuado Company as a whole? A. $2,400 increase B. $3,000 decrease C. $5,400 increase D. $12,000 decrease 5. Licuado is considering the implementation of a $5,000 advertising program specifically targeted at one of the four product lines. The program is expected to increase sales for any one of the product lines by $12,000. If the goal is to maximize the company's net operating income, for which product line should Licuado implement the advertising program? A. Orange B. Tomato C. Carrot D. Grape E. any one of the product lines; the effect on net operating income will be identical 6. Consider a decision facing a company of either accepting or rejecting a special offer for one of its products. A cost that is not relevant is: A. direct materials. B. variable overhead. C. fixed overhead that will be avoided if the special offer is accepted. D. common fixed overhead that will continue if the special offer is not accepted.
Background image of page 2
7. Degner Inc. has some material that originally cost $19,500. The material has a scrap value of $13,300 as is, but if reworked at a cost of $2,100, it could be sold for $14,000. What would be the incremental effect on the company's overall profit of reworking and selling the material rather than selling it as is as scrap? A. -$20,900
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/14/2010 for the course FIN 240 taught by Professor - during the Spring '08 term at San Diego State.

Page1 / 12

A202 Fall2010 Quiz _5 version Accounting - A202 Fall2010...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online