In determining the dollar amount to use for operating assets in the return on investment (ROI) calculation, companies will generally use either net book value or gross cost of the assets. Which of the following is an argument for the use of net book value rather than gross cost?a) It is consistent with how assets are reported on the balance sheet. b) It eliminates the depreciation method as a factor in ROI calculations. c) It encourages the replacement of old, worn-out equipment. d) All of the above.

The following cost and inventory data are taken from the accounting records of mason company for the year just completed: costs incurred: direct labor cost $ 90,000 purchases of raw materials $ 134,000 manufacturing overhead $ 205,000 advertising expense $ 45,000 sales salaries $ 101,000 depreciation, office equipment $ 225,000 beginning of the year end of the year inventories: raw materials $ 8,100 $ 10,300 work in process $ 5,900 $ 21,000 finished goods $ 77,000 $ 25,800 required: 1. prepare a schedule of cost of goods manufactured. 2. prepare the cost of goods sold section of mason company’s income statement for the year.