A202 Fall2010 Quiz #5 version AStudent: ___________________________________________________________________________
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:
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?