Question

56. Refer to Exhibit 10-2. What is the standard cost per unitfor variable manufacturing overhead?

a. $16.00

b. $4.80

c. $1.44

d. $10.00

e. None of the answer choices is correct.

Exhibit 11-1

Ashville Company has two divisions − Bikes and Trikes.

Ashville Company
Segmented Income Statements
For the Current Fiscal Year Ended December31
	Bikes Division	Trikes Division
Sales	$2,400,000	$1,000,000
Cost of goods sold	1,400,000	530,000
Gross margin	1,000,000	470,000
Allocated overhead (from corporate)	270,000	170,000
Selling and administrative expenses	190,000	140,000
Operating income	540,000	160,000
Income tax expense (40%)	216,000	64,000
Net income	$ 324,000	$ 96,000

56. Refer to Exhibit 11-1. Using the segmented incomestatements, what is the profit margin ratio for the Trikes Division(to the nearest tenth of a percent)?

a. 47%

b. 53%

c. 9.6%

d. 16.0%

e. None of the answer choices is correct.

57. Refer to Exhibit 11-1. Assume the Trikes Division hasaverage operating assets totaling $400,000 for the year. What isthe division's return on investment?

a. 19.2%

b. 40.0%

c. 90.0%

d. 24.0%

e. None of the answer choices is correct.

58. Refer to Exhibit 11-1. Assume the Trikes Division hasaverage operating assets totaling $400,000 for the year and thecompany's cost of capital rate is ten percent. What is the residualincome for the Trikes division?

a. $585,000

b. $1,380,000

c. $24,000

d. $120,000

e. None of the answer choices is correct.