The operating income and the amount of invested assets in each division of Conley Industries are as follows: Operating income Invested Assets Retail Division $123,900 $590,000 Commercial Division 182,400 760,000 Internet Division 137,800 530,000 Assume that management has established a 12% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Commercial Division Internet Division Operating income $123,900 $182,400 $137,800 Minimum acceptable operating income as a percent of invested assets Residual income $ $ $ b. Which division has the most residual income?
The operating income and the amount of invested assets in each division of Conley Industries are as follows: Operating income Invested Assets Retail Division $123,900 $590,000 Commercial Division 182,400 760,000 Internet Division 137,800 530,000 Assume that management has established a 12% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Commercial Division Internet Division Operating income $123,900 $182,400 $137,800 Minimum acceptable operating income as a percent of invested assets Residual income $ $ $ b. Which division has the most residual income?
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 11E: The operating income and the amount of invested assets in each division of Conley Industries are as...
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The operating income and the amount of invested assets in each division of Conley Industries are as follows:
| Operating income | Invested Assets | |||
| Retail Division | $123,900 | $590,000 | ||
| Commercial Division | 182,400 | 760,000 | ||
| Internet Division | 137,800 | 530,000 |
Assume that management has established a 12% minimum acceptable
a. Determine the residual income for each division.
| Retail Division | Commercial Division | Internet Division | ||||
| Operating income | $123,900 | $182,400 | $137,800 | |||
| Minimum acceptable operating income as a percent of invested assets | ||||||
| Residual income | $ | $ | $ |
b. Which division has the most residual income?
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