The following information pertains to Zootime Co.'s Shelter Division for the current year: (CPA adapted)
$$\begin{array} { l c }
\text { Sales } & \$ 311,000 \
\text { Variable cost } & \$ 250,000 \
\text { Traceable fixed costs } & \$ 50,000 \
\text { Average irvested capital } & \$ 40,000 \
\text { Imputed interest rate } & 10\%\

\end{array}$$
Zootime's return on investment was:
A) 10.00%.
B) 13.33%.
C) 27.50%.
D) 30.00%.

Question

The following information pertains to Zootime Co.'s Shelter Division for the current year: (CPA adapted)
$$\begin{array} { l c } 
\text { Sales } & \$ 311,000 \
\text { Variable cost } & \$ 250,000 \
\text { Traceable fixed costs } & \$ 50,000 \
\text { Average irvested capital } & \$ 40,000 \
\text { Imputed interest rate } & 10\%\

\end{array}$$
Zootime's return on investment was:
A) 10.00%.
B) 13.33%.
C) 27.50%.
D) 30.00%.

Quizplus · Accepted Answer

Return on investment (ROI) is calculated as (Net Income / Average Invested Capital). Net Income = Sales - Variable Costs - Traceable Fixed Costs = $311,000 - $250,000 - $50,000 = $11,000. ROI = $11,000 / $40,000 = 27.5%.

The Following Information Pertains to Zootime Co Zootime's Return on Investment Was: A) 10

The Following Information Pertains to Zootime Co Zootime's Return on Investment Was:
A) 10