Q1) Safety Seats Co. recorded operating data for its shoe division for year. Company's desired ROI is 5%.
|
Sales
|
$500,000
|
|
Variable costs
|
400,000
|
|
Contribution margin
|
100,000
|
|
Total direct fixed costs
|
60,000
|
|
Average total operating assets
|
200,000
|
Compute the residual income?
i) $20,000
ii) $30,000
iii) $40,000
iv) $90,000
v) $100,000