Rate of return on investment for stevenson

Question

Question 1: The following financial information was summarized from the accounting records of Block Corporation for the current year ended December 31:

Software
Division Hardware
Division Corporate
Total
Cost of goods sold    $47,200    $30,720
Direct operating expenses    27,200    20,040
Net sales    95,000    64,000
Interest expense    $ 2,040
General overhead    18,160
Income tax    4,700

The gross profit for the Software Division is _______.

• $47,800
• $20,600
• $13,240
• $33,280

Question 2: Stevenson Corporation had $275,000 in invested assets, sales of $330,000, income from operations amounting to $49,500 and a desired minimum rate of return of 7.5%. The rate of return on investment for Stevenson is _______.

• 8%
• 10%
• 18%
• 7.5%

Question 3: The Anderson Company has sales of $4,500,000. It also has invested assets of $2,000,000 and operating expenses of $3,600,000. The company has established a minimum rate of return of 7%.

What is Anderson Company's profit margin?

• 20%
• 80%
• 44.4%
• 18%

Question 4: In an investment center, the manager has the responsibility for and the authority to make decisions that affect _______.

• the assets invested in the center, but not costs and revenues
• costs and assets invested in the center, but not revenues
• both costs and revenues for the department or division
• not only costs and revenues, but also assets invested in the center

Question 5: Assume that Division P has achieved income from operations of $165,000 using $900,000 of invested assets. If management desires a minimum rate of return of 8%, the residual income is _______.

• $72,000
• $13,200
• $185,000
• $93,000

Question 6: The condensed income statement for a business for the past year is presented as follows:

Product
F G H Total
Sales    $300,000    $220,000 $340,000    $860,000
Less variable costs    180,000 190,000 220,000 590,000
Contribution margin    $120,000    $ 30,000 $120,000    $270,000
Less fixed costs    50,000 50,000 40,000 140,000
Income (loss) from oper.    $ 70,000    $ (20,000)    $ 80,000    $130,000

Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change in net income for the current year that will result from the discontinuance of Product G?

• $20,000 increase
• $30,000 increase
• $20,000 decrease
• $30,000 decrease

Question 7: The condensed income statement for a business for the past year is as follows:

Product
T U
Sales    $600,000 $320,000
Less variable costs    540,000 220,000
Contribution margin    $ 60,000 $100,000
Less fixed costs    145,000 40,000
Income (loss) from operations    $ (85,000)    $ 60,000

Management is considering the discontinuance of the manufacture and sale of Product T at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product U. What is the amount of change in net income for the current year that will result from the discontinuance of Product T?

• $60,000 increase
• $85,000 increase
• $85,000 decrease
• $60,000 decrease