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choli [55]
2 years ago
10

Division ABC has $750,000 in average assets and $200,000 in income. Division XYZ has $800,000 in average assets and $210,000 in

income. The company's target rate is 10%. Which division has the highest residual income
Business
1 answer:
solniwko [45]2 years ago
5 0

If  Division XYZ has $800,000 in average assets and $210,000 in income. The division that has the highest residual income is: Division XYZ.

<h3>Residual income</h3>

Calculation  for ABC Residual income

Residual income=$200,000-(0.10×$750,000)

Residual income=$200,000-$75,000

Residual income=$125,000

Calculation for XYZ Residual income

Residual income=$210,000 -(0.10×$80,000)

Residual income=$210,000-$80,000

Residual income=$130,000

Inconclusion the division that has the highest residual income is:Division XYZ.

Learn more about residual income here:

brainly.com/question/17154580

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The ___________ is the only price where quantity demanded is equal to quantity supplied.
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How much will you save if you buy an item listed at $175.50 at a 35 percent discount?
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Determine the statements below that are true regarding why a bank reconciliation is used. (Check all that apply.) a) The Cash ac
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b)Timing differences between the bank statement and the depositor's records are reflected in the bank reconciliation.

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Murray Exports (U.S.) exports heavy crane equipment to several Chinese dock facilities. Sales are currently 10,000 units per yea
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Answer:

Murray Exports (U.S.)

A. The short-run impact of each pricing strategy is as follows:

                                            Alternative 1                    Alternative 2

                              Reduce Price to $21,867    Maintain Price at $24,000

Gross profit                         $38,670,000               $54,000,000

Reduction in Gross Profit   $21,330,000                 $6,000,000

B.  (2) maintain the same dollar price of $24,000, raise the yuan price in China to Yuan 216,000 per unit to offset the devaluation, and experience a 10% drop in sales unit volume.  

 

Explanation:

a) Data and Calculations:

Current exchange rate = Yuan 8.20/US$

Current exports of heavy crane equipment per year to China = 10,000

US unit price of printer in dollars = $24,000

Chinese unit price of crane equipment in Yuan equivalent = Yuan 196,800 ($24,000 * Yuan 8.20)

Unit price of crane equipment in Chinese Yuan when the currency is devalued = Yuan 216,000 ($24,000 * Yuan 9.00)

The reduced dollar price with devaluation, when Yuan price is maintained = $21,867 (Yuan 196,800/9.00)

Before Devaluation of Chinese Yuan:

Sales volume            10,000

Sales revenue $240,000,000 (10,000 * $24,000)

Direct costs        180,000,000 (10,000 * $18,000) (75% of $24,000)

Gross profit       $60,000,000

                             Alternative 1                         Alternative 2

                       Reduce Price to $21,867    Maintain Price at $24,000

Sales volume                10,000 units             9,000 (10,000 * 90%) units

Sales revenue      $218,670,000             $216,000,000 ($24,000 * 9,000)

Direct costs            180,000,000               162,000,000 ($18,000 * 9,000)

Gross profit           $38,670,000               $54,000,000 ($6,000 * 9,000)

Direct costs = $180m ($18,000 * 10,000)  = $162m ($18,000 * 9,000)

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2 years ago
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