Calculating Residual Income Forchen, Inc., provided the following information for two of its divisions for last year:            Small Appliances Division Cleaning Products Division Sales $34,670,000      $31,380,000      Operating income 2,326,200      1,254,500      Operating assets, January 1 6,393,000      5,800,000      Operating assets, December 31 7,540,000      6,790,000        Forchen, Inc., requires an 6 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)
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Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing
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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 $34,670,000      $31,380,000     
Operating income 2,326,200      1,254,500     
Operating assets, January 1 6,393,000      5,800,000     
Operating assets, December 31 7,540,000      6,790,000     

 

Forchen, Inc., requires an 6 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

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