The current departmental margin for Stern Division is $124,000. Its current operating assets are $400,000. The division is considering purchasing equipment for $120,000 that will increase annual departmental margin by an estimated $20,000. If the equipment is purchased, what will happen to the return on investment for Stern Division? (Points : 3)

a An increase of 16.1% b A decrease of 13.3% c A decrease of 3.3% d A decrease of 7.2% e none of these

The process of preparing departmental income statements includes allocating: (Points : 1)

a opportunity costs b service department costs c manufacturing expenses d non-controllable costs e none of of these

Mach Co. operates three production departments as profit centers. The following information is available for its most recent year:

Dept	Sales	Cost of Goods Sold	Direct Expenses	Indirect expenses
1	$1,000,000	$700,000	$100,000	$80,000
2	400,000	150,000	40,000	100,000
3	700,000	300,000	150,000	20,000

Department 1's contribution to overhead as a percent of sales is: (Points : 3)

a 8%. b 40%. c 20%. d 30%. e 12%.