cons3D Zoom Link Action Bose & Footer Text $690,000 $2,000,000 $1,380,000 Total
ID: 2431995 • Letter: C
Question
cons3D Zoom Link Action Bose & Footer Text $690,000 $2,000,000 $1,380,000 Total assets Current labilies Pendant's target rate of return is 20% and the weighted average cost of capital is 5% Itsetdve tax rate is 30% What is the Textbook Division's Residual Income (Ru? OA. S100.000 OB. $400,000 O C. $330,000 O D. $290.000 Flash E-Card Flash E- Card Flash C Direct labor ing Costs and Variable Expense Report $90 $170 $195 $148 Variable selling expenses (only incurred on sales to outside consurners O A. $170 O B. $1.120 OD. S0Explanation / Answer
1
Answer:
the Textbook Division's Residual Income (RI) = D) $290,000
Working notes for the above answer is as under
Target Return
= Total Assets × Required Return
= 2,000,000 × 20%
=400,000
Residual Income
= Operating Income - Target Return
=690,000-400,000
=290,000
_______________________________________________________
2
the lowest acceptable in house price =B) $1120
Working notes for the above answer is as under
Amount $
Direct Material
860
Direct Labor
90
variable Manufacturing Overhead
170
the lowest acceptable in house price
1120
Amount $
Direct Material
860
Direct Labor
90
variable Manufacturing Overhead
170
the lowest acceptable in house price
1120
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