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ruslelena [56]
4 years ago
9

Dartford Company reported the following financial data for one of its divisions for the year; average investment center total as

sets of $4,100,000; investment center income $700,000; a target income of 12% of average invested assets. The residual income for the division is:
Business
1 answer:
Alexandra [31]4 years ago
4 0

Answer:

$208,000

Explanation:

Calculation for Dartford Company residual income

Using this formula

Residual income=Investment center income -(Target income percentage of average invested assets ×Average investment center total assets)

Let plug in the formula

Residual income =$700,000-(12%×$4,100,000)

Residual income =$700,000 - $492,000

Residual income =$208,000

Therefore The residual income for the division is: $208,000

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3 years ago
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