1.a)

Shown below are selected data from the financial statements of Supreme Co. Dollar amounts are in millions (except for the per share data).

Income statement data:
Net sales	$	1,230
Cost of goods sold	$	520
Operating expenses	$	440
Net income	$	390
Balance sheet data:
Average total equity	$	2,400
Average total assets	$	4,000

Supreme reported earnings per share for the year of $4 and paid cash dividends of $1 per share. At year-end, the Wall Street Journal listed Supreme's capital stock as trading at $88 per share.

Supreme's return on assets was:

Select one:

a. 9. 75%.

b. 6. 75%.

c. 17. 75%.

d. 30. 75%.

1.b)

All of the following are true of operating expenses except:

Select one:

a. Operating expenses are incurred for the purpose of producing revenue.

b. Operating expenses are subdivided into the classifications of component and trend.

c. The administrative expenses portion of operating expenses tends to remain constant from period to period.

d. Subdividing operating expenses into different classifications helps managers and investors evaluate different aspects of the company's operations.