must first determine how the company defines and measures invested capital. In this case, we will explore the following definitions of invested capital:
1. Total assets: All assets are included.
2. Stockholders ' equity: Focuses on the investment of the owners of the business.
E10-34( similar to) p. 405
A chair ' s variable cost is $ 50 and its market value as a piece of unfinished furniture is $ 60 at a transfer point from the assembly division to the finishing division. The finishing division ' s variable cost of sanding and finishing the chair is $ 22, and the selling price of the finished chair is $ 76.