Which of the following statements is true? 1. Return on investment (ROI) equals margin multiplied by sales. 2. When used in return on investment (ROI) calculations, turnover equals sales divided by average operating assets. 3. Net operating income is income after interest and taxes. 4. An advantage of using ROI to evaluate performance is that it encourages the manager to reduce the Investment in operating assets as well as increase net operating income. Multiple Cholce Both statements 1 and 3 are true. Both statements 2 and 4 are true. All of the statements are true. None of the statements are true. For performance evaluation purposes, the fixed costs of a service department should be charged to operating departments using: Multiple Cholce actual fixed costs and the budgeted level of activity for the perlod. budgeted fixed costs and the actual level of actlvity for the perlod. budgeted fixed costs and the peak-perlod or long-run average servicing capacity. actual fixed costs and the peak-perlod or long-run average servicing capacity
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