Question : 154. The Everest Company has income from operations of $80,000, invested : 1227024

154. The Everest Company has income from operations of $80,000, invested assets of $500,000, and sales of $1,030,000.

What is the profit margin? 
A. 48.5%
B. 7.8%
C. 16.0%
D. 4.3%

155. The Everest Company has income from operations of $80,000, invested assets of $500,000, and sales of $1,030,000.

What is the investment turnover? 
A. 6.25
B. 2.06
C. .49
D. 12.88

156. The balanced scorecard measures 
A. only financial information
B. only nonfinancial information
C. both financial and nonfinancial information
D. external and internal information

157. Which of the following is not a commonly used approach to setting transfer prices? 
A. Market Price Approach
B. Revenue Price Approach
C. Negotiated Price Approach
D. Cost Price Approach

158. Determining the transfer price as the price at which the product or service transferred could be sold to outside buyers is known as the: 
A. Cost Price Approach
B. Negotiated Price Approach
C. Revenue Price Approach
D. Market Price Approach

159. Materials used by Square Yard Products Inc. in producing Division 3’s product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6’s current sales.

How much would Division 3’s income from operations increase? 
A. $150,000
B. $50,000
C. $32,000
D. $72,000

160. Materials used by Square Yard Products Inc. in producing Division 3’s product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6’s current sales.

How much would Division 6’s income from operations increase? 
A. $8,000
B. $15,000
C. $80,000
D. $150,000

161. Materials used by Square Yard Products Inc. in producing Division 3’s product are currently purchased from outside suppliers at a cost of $5 per unit. However, the same materials are available from Division 6. Division 6 has unused capacity and can produce the materials needed by Division 3 at a variable cost of $3 per unit. A transfer price of $3.20 per unit is established, and 40,000 units of material are transferred, with no reduction in Division 6’s current sales.

How much would Square Yard Products total income from operations increase? 
A. $32,000
B. $112,000
C. $80,000
D. $150,000

162. Materials used by Jefferson Company in producing Division C’s product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 30,000 units of material are transferred, with no reduction in Division A’s current sales.

How much would Division C’s income from operations increase? 
A. $0
B. $90,000
C. $15,000
D. $60,000

163. Materials used by Jefferson Company in producing Division C’s product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 30,000 units of material are transferred, with no reduction in Division A’s current sales.

How much would Division A’s income from operations increase? 
A. $0
B. $90,000
C. $30,000
D. $60,000