Exercise 9-10A (Algo) Residual income LO 9-3Finch Cough Drops operates two divisions. The following information pertains to each division for Year 1.Division ADivision BSales$ 205.000$ 90,000Operating incomeAverage operating assets$ 16,500Company's desired rate of return$ 59.00018%$ 9,400$ 40,00018%Requireda. Compute each division's residual income.b. Which division increased the company's profitability more?a. Division Aa. Division Bb. The division that increased the company's profitability more isResidualIncome

Step 1: a) Residual Income can be calculated by subtracting the minimum required return on average…

Answered: Exercise 9-10A (Algo) 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 5BE: Residual income The Commercial Division of Galena Company has operating income of 12,680,000 and...

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Exercise 15-15A (Algo) Residual income LO 15-7 Jordan Cough Drops operates two divisions. The following information pertains to each division for the year. Sales Operating income Average operating assets Company's desired rate of return Division A Division B $220,000 $83,000 $ 16,500 $ 8,400 $39,000 $ 61,000 13% Required a. Compute each division's residual income. b. Which division increased the company's profitability more? a. Division A Division B b. The division that increased the company's profitability more is 13% Residual Income
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Adams Cough Drops operates two divisions. The following information pertains to each division for Year 1. Division A Division B $200,000 $85,000 $ 16,100 $ 9,300 $ 59,000 $37,000 17% Sales Operating income Average operating assets Company's desired rate of return 17% Required a. Compute each division's residual income. b. Which division increased the company's profitability more? a. Division A Division B b. The division that increased the company's profitability more is Residual Income
Residual Income The income from operations and the amount of invested assets in each division of Beck Industries are as follows: Income from Operations Invested Assets Retail Division $102,900 Commercial Division 115,000 Internet Division 123,200 Assume that management has established a 8% minimum acceptable return for invested assets. a. Determine the residual income for each division. Income from operations Minimum acceptable of income from operations Residual income b. Which division has the most residual income? Commercial Division 490,000 500,000 770,000 Retail Division Commercial Division $102,900 $115,000 Internet Division $123,200
Jordan Company has two divisions, which reported the following results for the most recent year. Division I Division II Income ₱ 02,700,000 ₱ 00,600,000 Average invested capital ₱ 18,000,000 ₱ 03,000,000 ROI 15% 20% Imputed interest rate = 10% What is the residual income of Division II? Group of answer choices ₱ 0 ₱ 300,000 ₱ 900,000 ₱ 294,000
Residual income The Commercial Division of Galena Company has operating income of 12,680,000 and assets of 74,500,000. The minimum acceptable return on assets is 12%. What is the residual income for the division?
☐ E 1 2 ChairCo, Inc. reports the following financial information for its Table Division: Average operating assets $2,095,000 Controllable margin Minimum rate of return $246,224 10 % Compute the residual income for the Table Division. 3 Type your answer...
The sales, income from operations, and invested assets for each division of Wren Company are as follows: Income from Invested Sales Operations Assets Division C 5.00 $630,000 $4,000,000 Division D 6,800,000 760,000 3,900,000 Division E 3,750,000 750,000 7,500,000 Management has established a minimum rate of return for invested assets of 10%. Do Not Use Commas or $ in Your Answers What is the Residual Income for Division C? What is the Residual Income for Division D? What is the Residual Income for Division E? Based on Residual Income, Division is the most profitable.
Subject: acounting
Residual Income The income from operations and the amount of invested assets in each division of Beck Industries are as follows: Income from Operations Invested Assets Retail Division $63,800 $290,000 Commercial Division 58,900 310,000 Internet Division 144,000 800,000 Assume that management has established a 8% minimum acceptable return for invested assets. a. Determine the residual income for each division. Retail Division Commercial Division Internet Division Income from operations $63,800 $58,900 $144,000 Minimum acceptable income from operations as a percent of invested assets fill in the blank 1 fill in the blank 2 fill in the blank 3 Residual income $fill in the blank 4 $fill in the blank 5 $fill in the blank 6 b. Which division has the most residual income?
QUESTION 4 The following results are available for Division X and Y:Division X Division YProfit before interest and tax P185 000 P172, 000Capital employed P1, 540, 000 P1, 650, 000 The cost of capital is 10%.Calculate and comment on the performance of the departments based on:a. Return on capital employed b. Residual income

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