21 2.5$ The following information pertains to questions 20 - 22. Sales revenue for the Northern Division of Batdorf Company for the most recent period was $4,650,000. Northern Division has a variable cost ratio of 60% and total fixed costs of $465,000. Operating assets at the end of the period were $4,025.000, which represents a 15% increase over the beginning balance. Return on investment and residual income for Northern Division are computed based on average operating assets. The required rate of return at Batdorf Company is 10%. Q21. What is Northern Division's return on investment for the period? (Round your answer to two decimal places.) O 9.75% 15.37% 0 27.50% 0 37.08% None of the above 24 2.5 The following data are available for Alpha Division for the month of November: Sales revenue $400.000 Operating $500.000 assets Fixed costs $100.000 60% Variable cost ratio Required rate af return 14% If Alpha decreases its operating assets by 24% in December and there are no other changes to this data in the month of December, then what will Alpha's residual income be in December? O $1,200 O $2.250 O $6,800 O $10.100 O None of the above 25 2.5 Oscar Company has two divisions: A and B. Division A makes a part it sells to customers outside the company. Data for this part are below: Selling price to $125 per unit outside customers Variable cost per unit $71 Total fixed costs $156,750 Capacity 15.500 units Division B would like to use this part in one of its products. Division B currently buys a similar part from another company for $122 per unit and would be able to substitute the part made by Division A if internal trade is possible. Division B needs 1,000 units of the part each period. Division A has enough capacity to produce the units for Division B without any increase in fixed costs and without interfering with its sales to outside customers. If Division A sells to Division B rather than selling to outside customers, then its variable cost per unit would be $11 lower because it could avoid shipping costs. What should be the lowest acceptable transfer price for this part from the perspective of Division A? O $60 O $71 O $82 O $125 O None of the above 26 2.5 The Midwest Division of NCLH Ltd. has the capacity to make 6,000 units of a product per month and regularly sells 5,400 units per month to outside customers at $115 per unit. The product's variable cost per unit is $61. The Western Division of NCLH Ltd. would like to buy 900 units per month from Midwest Division. What should be the lowest acceptable transfer price for the product from the perspective of Midwest Division? O $115 per unit O $79 per unit O $61 per unit O $54 per unit O None of the above