The following results pertain to an investment center. Sales $ 1,306,000 Variable costs 710,000 Traceable fixed costs 106,000 Average investment 980,000 Divisional cost of capital (discount rate) 12 % How much is the residual income (RI) for this investmen

The following results pertain to an investment center. Sales $ 1,306,000 Variable costs 710,000 Traceable fixed costs 106,000 Average investment 980,000 Divisional cost of capital (discount rate) 12 % How much is the residual income (RI) for this investmen

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The following results pertain to an investment center.


Sales	$	1,306,000
Variable costs		710,000
Traceable fixed costs		106,000
Average investment		980,000
Divisional cost of capital (discount rate)		12	%

How much is the residual income (RI) for this investment center?

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