131. Division Q for Mott Company has a rate of return on investment of 28% and an investment turnover of 1.4. What is the profit margin? 
A. 28%
B. 20%
C. 14%
D. 39.2%

132. Division I of Norris Company has a rate of return on investment of 28% and a profit margin of 20%. What is the investment turnover? 
A. 3.6
B. 1.4
C. 5.0
D. .7

133. What additional information is needed to find the rate of return on investment if income from operations is known? 
A. Invested assets
B. Residual income
C. Direct expenses
D. Sales

134. Division A of Purvis Company has a rate of return on investment of 15% and an investment turnover of 1.2. What is the profit margin? 
A. 10%
B. 12.5%
C. 9%
D. 6%

135. The best measure of managerial efficiency in the use of investments in assets is: 
A. rate of return on stockholders' equity
B. investment turnover
C. income from operations
D. inventory turnover

136. Two divisions of Halloway Company (Divisions X and Y) have the same profit margins. Division X's investment turnover is larger than that of Division Y (1.2 to 1.0). Income from operations for Division X is $50,000, and income from operations for Division Y is $38,000. Division X has a higher return on investment than Division Y by: 
A. using income from operations as a performance measure
B. comparing income from operations
C. applying a negotiated price measure
D. using its assets more efficiently in generating sales

137. The profit margin for Division K is 8% and the investment turnover is 1.20. What is the rate of return on investment for Division K? 
A. 8%
B. 6.7%
C. 7.3%
D. 9.6%

138. The excess of divisional income from operations over a minimum amount of divisional income from operations is termed: 
A. profit margin
B. residual income
C. rate of return on investment
D. gross profit

139. Assume that divisional income from operations amounts to $187,000 and top management has established 15% as the minimum rate of return on divisional assets totaling $1,000,000. The residual income for the division is: 
A. $37,000
B. $28,050
C. $67,000
D. $0

140. Which one of the following is NOT a measure that management can use in evaluating and controlling investment center performance? 
A. Rate of return on investment
B. Negotiated price
C. Residual income
D. Income from operations