Acct505 Quiz

PAGE 1:

1. (TCO D) Return on investment (ROI) is equal to the margin multiplied by (Points : 5)

Ans: turnover (b)
2. (TCO D) Given the following data, what would ROI be?

Ans: 20% (b)
3. (TCO D) Last year, the House of Orange had sales of $826,650, net operating income of $81,000, and operating assets of $84,000 at the beginning of the year and $90,000 at the end of the year. What was the company's turnover, rounded to the nearest tenth? (Points : 5)

Ans: 9.5 (a)
Page 2:
1. (TCO D) Data for December concerning Dinnocenzo Corporation's two major business segments-Fibers and Feedstocks-appear below:
Sales revenues, Fibers $870,000
Sales revenues, Feedstocks $820,000
Variable expenses, Fibers $426,000
Variable expenses, Feedstocks $344,000
Traceable fixed expenses, Fibers $148,000
Traceable fixed expenses, Feedstocks S156,000
Common fixed expenses totaled $314,000 and were allocated as follows: $129,000 to the Fibers business segment and $185,000 to the Feedstocks business segment.

Required:

Prepare a segmented income statement in the contribution format for the company. Omit percentages; show only dollar amounts.
(Points : 25)
Ans: Dinnocenzo Corporation
Income statement for the year ended ..........
Description Company Fibers Feedstocks
Revenue 1,690,000 870,000 820,000
Variable costs 770,000 426,000 344,000 ---------------------------------
Contribution Margin 920,000 444,000 476,000
Traceable fixed Expenses 304,000 148,000 156,000 ----------------------------------
Segment Margin 616,000 296,000 320,000
Common Fixed Expenses 314,000 -------------
Net Operating Income 302,000