Residual Income The Consumer Division of Lewandowski Company has income from operations of $9,043,000 and assets of $57,900,000. The minimum acceptable return on assets is 11%. What is the residual income for the division?

Residual Income The Consumer Division of Lewandowski Company has income from operations of $9,043,000 and assets of $57,900,000. The minimum acceptable return on assets is 11%. What is the residual income for the division?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 5BE: Residual income The Commercial Division of Galena Company has operating income of 12,680,000 and...

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Question

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Residual Income
The Consumer Division of Lewandowski Company has income from operations of $9,043,000 and assets of $57,900,000. The minimum acceptable return
on assets is 11%.
What is the residual income for the division?

Expert Solution

Step 1

Given that:

Income from operations = $90,43,000

Assets invested = $57,900,000

Minimum acceptable return on assets = 11%

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