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Return on investment and variable costings

11) Company A's revenues are $300 on invested capital of $240. Expenses are currently 70% of sales. If Angelo Company can reduce its capital investment by 20% in Company A, return on investment will be _____.

A. 75%
B. 93.75%
C. 18.75%
D. 46.88%

12) When the variable costing method is used, fixed factory overhead appears on the income statement as a _____.

A. component of cost of goods sold
B. fixed expense
C. production-volume variance
D. component of gross profit

13) In absorption costing, costs are separated into the major categories of _____.

A. manufacturing and nonmanufacturing
B. manufacturing and fixed
C. fixed and variable
D. variable and nonmanufacturing

14) _____ is another term for variable costing.

A. Full costing
B. Direct costing
C. Traditional costing
D. Absorption costing

Solution Preview

1) Company A's revenues are $300 on invested capital of $240. Expenses are currently 70% of sales. If Angelo Company can reduce its capital investment by 20% in Company A, ...

Solution Summary

Solution discusses return on investment

$2.19