1Assume a company had net operating income of $300,000, sales of $1,500,000, average operating assets of $1,000,000, and a minimum required rate of return on average operating assets of 11.25%. The company's residual income is closest to: A $87, 500. B $187, 500 C $131,250 D $231, 250 2Assume a company reported the following results: Sales $300, 000 Net operating income? Average operating assets $187, 500 Margin? Turnover ? Return on investment (ROI) 70% The margin is closest to: A70%, B 40%, C 63%, D 23% 3Assume a company has two products-A and B-that emerge from a joint process. Product A has been allocated $24,000 of the total joint costs of $48,000. A total of 2,000 units of Product A are produced from the joint process. Product A can be sold at the split-off point for $16 per unit, or it can be processed further for an additional total cost of $14,500 and then sold for $25 per unit. What is the financial advantage (disadvantage) of further processing Product A? A -$3,500 B $3,500 C-$22,000 D $22,000
1Assume a company had net operating income of $300,000, sales of $1,500,000, average operating assets of $1,000,000, and a minimum required rate of return on average operating assets of 11.25%. The company's residual income is closest to: A $87, 500. B $187, 500 C $131,250 D $231, 250 2Assume a company reported the following results: Sales $300, 000 Net operating income? Average operating assets $187, 500 Margin? Turnover ? Return on investment (ROI) 70% The margin is closest to: A70%, B 40%, C 63%, D 23% 3Assume a company has two products-A and B-that emerge from a joint process. Product A has been allocated $24,000 of the total joint costs of $48,000. A total of 2,000 units of Product A are produced from the joint process. Product A can be sold at the split-off point for $16 per unit, or it can be processed further for an additional total cost of $14,500 and then sold for $25 per unit. What is the financial advantage (disadvantage) of further processing Product A? A -$3,500 B $3,500 C-$22,000 D $22,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ll.78.

Transcribed Image Text:1Assume a company had net operating income of $300,000, sales of $1,500,000, average operating assets of $1,000,000,
and a minimum required rate of return on average operating assets of 11.25%. The company's residual income is closest to:
A $87, 500.
B $187, 500
C $131,250
D $231, 250
2Assume a company reported the following results:
Sales $300, 000
Net operating income?
Average operating assets $187, 500
Margin?
Turnover ?
Return on investment (ROI) 70%
The margin is closest to:
A70%, B 40%, C 63%, D 23%
3Assume a company has two products-A and B-that emerge from a joint process. Product A has been allocated $24,000 of
the total joint costs of $48,000. A total of 2,000 units of Product A are produced from the joint process.
Product A can be sold at the split-off point for $16 per unit, or it can be processed further for an additional total cost of
$14,500 and then sold for $25 per unit. What is the financial advantage (disadvantage) of further processing Product A?
A -$3,500
B $3,500
C-$22,000
D $22,000
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