Calculating Residual Income Forchen, Inc., provided the following information for two of its divisions for last year: Small Appliances Division Cleaning Products Division Sales $34,610,000 $31,300,000 Operating income 2,723,200 1,254,300 Operating assets, January 1 6,394,000 5,750,000 Operating assets, December 31 7,520,000 6,120,000 Forchen, Inc., requires an 7 percent minimum rate of return. Required: 1. Calculate residual income for the Small Appliances Division. $ fill in the blank 2. Calculate residual income for the Cleaning Products Division. $ fill in the blank
Calculating Residual Income Forchen, Inc., provided the following information for two of its divisions for last year: Small Appliances Division Cleaning Products Division Sales $34,610,000 $31,300,000 Operating income 2,723,200 1,254,300 Operating assets, January 1 6,394,000 5,750,000 Operating assets, December 31 7,520,000 6,120,000 Forchen, Inc., requires an 7 percent minimum rate of return. Required: 1. Calculate residual income for the Small Appliances Division. $ fill in the blank 2. Calculate residual income for the Cleaning Products Division. $ fill in the blank
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing
Section: Chapter Questions
Problem 1CE: Forchen, Inc., provided the following information for two of its divisions for last year: Required:...
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Calculating Residual Income
Forchen, Inc., provided the following information for two of its divisions for last year:
Small Appliances Division |
Cleaning Products Division |
|
Sales | $34,610,000 | $31,300,000 |
Operating income | 2,723,200 | 1,254,300 |
Operating assets, January 1 | 6,394,000 | 5,750,000 |
Operating assets, December 31 | 7,520,000 | 6,120,000 |
Forchen, Inc., requires an 7 percent minimum
Required:
1. Calculate residual income for the Small Appliances Division.
$ fill in the blank
2. Calculate residual income for the Cleaning Products Division.
$ fill in the blank
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