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 FED is often referred to as the "_________________" Bank.
Leviafan [203]

Answer:

erfegr

Explanation:

6 0
3 years ago
Exercise 19-9 Income statement under absorption costing and variable costing LO P1, P2 IThe following information applies to the
ivolga24 [154]

Answer:

When you are calculating variable costing, COGS only includes variable costs. All fixed costs are included as period costs at the end. Fixed costs are not carried forward either.        

             <u> Income Statement (variable costing) - J Cool Sky</u>

total sales $140 x 36,000 units sold =                                   $5,040,000

variable COGS                                                                        ($3,240,000)

variable direct costs ($60 + $22) x 36,000 = ($2,952,000)

<u>variable overhead ($8 x 36,000)                       ($288,000)                       </u>        

manufacturing margin                                                              $1,800,000

<u>variable administrative and selling costs ($11 x 36,000) =     ($396,000)  </u>  

contribution margin                                                                   $1,404,000

fixed costs                                                                                  ($633,000)

fixed overhead =                                               ($528,000)

<u>administrative and selling =                              ($105,000)                           </u> 

net income                                                                                    $771,000

In order to prepare the income statement using absorption costing, we must first determine COGS = [(total variable manufacturing costs + total fixed manufacturing costs) / total output] x units actually sold

COGS = {[($60 + $22 + $8) x 44,000] + $528,000} / 44,000] x 36,000 = [($3,960,000 + $528,000) / 44,000] x 36,000 = $102 x 36,000 = $3,672,000

          <u> Income Statement (absorption costing) - J Cool Sky</u>

total sales $140 x 36,000 units sold =                                   $5,040,000

<u>COGS                                                                                      ($3,672,000)</u>

gross profit                                                                                $1,368,000

variable administrative and selling costs $11 x 36,000 =       ($396,000)    

<u>fixed administrative and selling costs                                      ($105,000)</u>

net income                                                                                  $867,000

The difference between both accounting methods is that variable costing includes all fixed manufacturing costs during the period and the ending inventory is carried forward only at a lower cost since it only includes variable costs. Absorption costing calculates ending inventory using the total fixed costs, that is why COGS is lower.

3 0
3 years ago
A study of an association between which ear is used for cell phone calls and whether the subject is​ left-handed or​ right-hande
Mandarinka [93]

Answer:

14.34%

Explanation:

To find the percentage of returned surveys over the total we divide and then multiply:

(717/5000)*100= 14.34%

The response rate appears to be low because it is less than 50% (which would be 2500 return surveys). Some statistical studies agree that 30 is the minimum number of observations a study must have, but this number does not ensure statistically significant results.  

The problem with a very low response rate is that survey´s answers does not significant represent the study population characteristics and so we cannot make inferences, correlations or regressions that are statistically significant. In this case, the conclusions that scientists make about association between the left-handed population and right-handed population with the use of cell phone calls could be wrong or not represent the population characteristics, which means answers are not trustful.  

8 0
3 years ago
What do you think would happen to the expected return on stocks if investors perceived an increase in the volatility of stocks?
olya-2409 [2.1K]

Answer:

Higher is the correct answer.

Explanation:

4 0
3 years ago
Hailey files a discrimination charge against her company as it pays less wages to African American employees. The company demote
artcher [175]

Answer:

retaliation.

Explanation:

Title VII of hte Civil rights Act of 1964 prohibits discrimination at work based on race, color, ethnic origin, gender, religion, etc. What the company was doing was wrong, and the Equal Employment Opportunity Commission  (EEOC) should deal with this issue. But what they did to Hailey for complaining about the company's wrong deeds is twice as bad. The company not only keeps discriminating African American employees but also retaliates against Hailey for demanding something that is correct and legal.

4 0
2 years ago
Read 2 more answers
Other questions:
  • Patton has acquired several other companies. Assume that Patton purchased Kate for $ 9 comma 000 comma 000 cash. The book value
    14·1 answer
  • Which of the following is an example of the benchmarking function of the budgeting​ process? A. The budget outlines a specific c
    7·1 answer
  • You sell friendship bracelets. You have an agreement with your best friend, Georgina, who is a great artist in
    5·2 answers
  • Driving does not require a high degree of awareness in the driving environment. a) true b) false
    6·2 answers
  • A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the c
    13·1 answer
  • A business may explore the advantages of​ licensing, franchising, management​ contracts, and turnkey projects. After businesses
    13·1 answer
  • A government annually collects $320 billion in tax revenue and allocates $80 billion to education spending. What percentage of t
    10·1 answer
  • Margot starts a new business and contributes $20,000 in cash; she also borrows $25,000 from her local bank. She utilizes the cas
    5·1 answer
  • Fulbright Corp. uses the periodic inventory system. During its first year of operations, Fulbright made the following purchases
    10·1 answer
  • An employee compiled sales data for a company once each month. The scatter plot below shows the sales (in multiples of $1000) fo
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!