Residual income = Net income - (Average operating assets * Minimum required rate of return)
= $76,700 - ($530,000 * 13%)
= $76,700 - $68,900
= $7,800
The answer is D.
Select the best answer for the question. 3. Koogle Corporation uses residual income to evaluate the...
Select the best answer for the question 3. Koogle Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required rate of return is 13%. In August, the commercial products division had average operating assets of $530,000 and net operating income of $76,700. What was the commercial products division's residual income in August? A. ($9,971) B. ($7,800) C. $9.971 D. $7,800 Mark for review (Will be highlighted on the review page) 4. Hair Corporation bases its...
Rachael Corporation uses residual income to evaluate the performance of its divisions. The company's minimum required rate of return is 11%. In April, the Commercial Products Division had average operating assets of $100,000 and net operating income of $20,000. What was the Commercial Products Division's residual income in April? Group of answer choices A. $9,000 B. $80,000 C. $79,000 D. $20,000
The Casket Division of Saal Corporation had average operating assets of $1,110,000 and net operating income of $295,200 in January. The company uses residual income to evaluate the performance of its divisions, with a minimum required rate of return of 20%. Required: What was the Casket Division's residual income in January?
The Casket Division of Saal Corporation had average operating assets of $1,090,000 and net operating income of $275,200 in January. The company uses residual income to evaluate the performance of its divisions, with a minimum required rate of return of 18%. Required: What was the Casket Division's residual income in January?
The Casket Division of Saal Corporation had average operating assets of $1,050,000 and net operating income of $235,200 in January. The company uses residual income to evaluate the performance of its divisions, with a minimum required rate of return of 14% Required: What was the Casket Division's residual income in January? Residual income < Prex 2 of 13 Next >
QUESTION 23 Hasbro Company makes wheels which it uses in the production of children's bikes. Hasbro's costs to produce 100,000 wheels annually are as follows Direct Material $40,000 Variable Manufacturing Overhead An outside supplier has offered to sell Hasbro similar wheels for $1.80 per wheel. If the wheels are purchased from the outside supplier, $25,000 of annual fixed manufacturing overhead would be avoided and the facilities now being used to make the wheels would be rented to another company for...
The Casket Division of Saal Corporation had average operating assets of $1,020,000 and net operating income of $205,200 in January. The company uses residual income to evaluate the performancee of its divisions, with a minimum required rate of return of 14% Required: What was the Casket Division's residual income in January? Residual income
Problem 11-18 Return on Investment (ROI) and Residual Income (LO11-1, LO11-2] "I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division. "But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." 6.25 points Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on...
Problem 11-18 Return on Investment (ROI) and Residual Income [LO11-1, LO11-2] "I know headquarters wants us to add that new product line," said Dell Havasi, manager of Billings Company's Office Products Division. "But I want to see the numbers before I make any move. Our division's return on investment (ROI) has led the company for three years, and I don't want any letdown." Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis...
2. Cabell Products is a division of a major corporation. Last year the division had total sales of $21,720,000, net operating income of $1,346,640, and average operating assets of $4,778,400. The company's minimum required rate of return is 15%. The division's margin is closest to: Dacker Products is a division of a major corporation. The following data are for the most recent year of operations: Sales Net operating income Average operating assets The company's minimum required rate of return $38,380,000...