Calculating residual income for peanut and plain divisions, Accounting Basics

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Calculating residual income for peanut and plain divisions

Q1) Information for two divisions of Charming Confections Company is listed below:

	Peanut	Plain
Net income	$60,000	$100,000
Capital investment	$400,000	$500,000

a. If Charming Confections Company charges each division 12% for capital employed, calculate residual income for Peanut and Plain divisions.

b. Calculate ROI for each division.

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Accounting Basics: Calculating residual income for peanut and plain divisions

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Accounting Basics: Calculating residual income for peanut and plain divisions

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