Homework Answers
Ans. Option d. $75,000
*Calculation
Residual income = Net operating income - (Cost of operating assets * Minimum required rate of return)
= $300,000 - ($1,500,000 * 15%)
= $300,000 - $225,000
= $75,000
*Calculation of Net operating income:
Sales. $1,000,000
Less: Cost of goods sold. -$450,000
Gross margin. $550,000
Less: Operating expenses. -$250,000
Net operating income. $300,000
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