1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
ira [324]
3 years ago
12

The following information relates to Kew Company's Vale Division for last year: sales .................................. $500,00

0 variable costs ......................... 300,000 fixed costs ............................ 50,000 return on investment ................... 25% minimum required rate of return ........ 6% Calculate the residual income reported by Vale Division last year.
Business
1 answer:
-Dominant- [34]3 years ago
3 0

Answer:

$114,000

Explanation:

The computation of the residual income is shown below:

As we know that

Residual Income = Net operating Income - Average Operating assets × Required rate of return

where,

Net Operating Income is

= Sales Revenue - Variable Costs - Fixed Costs

= $500,000 - $300,000 - $50,000

= $150,000

And,

Average operating Assets is

= Net Operating Income ÷ Return on Investment

= $150,000 ÷ 0.25

= $600,000

So, the residual income is

= $150,000 - $600,000 × 6%

= $150,000 - $36,000

= $114,000

You might be interested in
The type of account and normal balance of unearned consulting fees is revenue, credit liability, credit liability, debit expense
alexdok [17]
The unearned consulting revenues are liabilities. A liability, in accounting terms, is an obligation and is found in the balance sheets of companies or businesses. When a company does transactions with other individuals or companies usually they owe amounts to creditors for the goods or services the company acquires. In another sense, a liability is a source of the company’s assets. They can also be considered as claims against the company’s assets. A liability may also include those amounts received by the company in advance of future services. Liabilities include accounts payable, notes payable, salaries payable, interest payable, bonds payable, accrued expenses payable, etc. Their normal balance is credit.
3 0
3 years ago
The fifth step of the financial planning process is to create and implement the financial action plan. What is involved in this
alexgriva [62]

Answer:

Developing an action plan that identifies ways to achieve your financial goals.

7 0
2 years ago
There is an upside to linking the s&op process with supply chain partners. for one thing, __________ can help firms do a bet
Tcecarenko [31]
I am not sure I will notify you when I know
7 0
3 years ago
According to your text, in the broadest terms, the "marketplace" refers to:_________
OLga [1]

Answer:

A. The World of trade

Explanation:

The marketplace is an economic system where companies compete with each other in order to sell their products. It is a place where trade occurs. In the broadest terms, a marketplace is the world of trade where buying of goods and services takes place.

8 0
3 years ago
What is a toxic leader?
andriy [413]

A selfish leader that lets his/her desires above the good of their people.

7 0
3 years ago
Read 2 more answers
Other questions:
  • When a firm enjoys a competitive advantage, it attracts a significant amount of attention and its products or services can be at
    9·2 answers
  • Bramble Corp. purchased land as a factory site for $1350000. Bramble paid $124000 to tear down two buildings on the land. Salvag
    6·1 answer
  • An oligopolistic market structure is distinguished by several characteristics, one of which is either similar or identical produ
    13·1 answer
  • If Angela's $98,760 home appreciates three percent a year, will she have enough appreciation to try to sell the home for a $15,0
    10·1 answer
  • Increasing your responsibility will increase your value to the company. T or F
    13·2 answers
  • Out of a list of the values 12, 7, 3, 5, 8, and 2, which result would the MIN function return?
    8·2 answers
  • Olivia owns a store with four employees and is taking Business 2425. She told her class that she tries to match the appropriate
    10·1 answer
  • Someone you look up to? And why?
    6·2 answers
  • This year, Jennifer company paid 4000 hundred thousand in wages and 850,000 for overhead expenses and 75,000 for advertising it
    12·1 answer
  • Ayesha Is Interested in fashion and already knows how to sew. She gets a part-time job in a shop, working on clothes so they pre
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!