The operating income and the amount of invested assets in each division of Conley Industries are as follows: Operating income Invested Assets Retail Division $63,000 $350,000 Commercial Division 60,800 380,000 Internet Division 138,000 600,000 Assume that management has established a 10% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Commercial Division Internet Division Operating income $63,000 $60,800 $138,000 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 $63,000 $350,000 Commercial Division 60,800 380,000 Internet Division 138,000 600,000 Assume that management has established a 10% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Commercial Division Internet Division Operating income $63,000 $60,800 $138,000 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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