1.
The Consumer Products Division of Goich Corporation had average operating assets of $800,000 and net operating income of $81,300 in May. The minimum required rate of return for performance evaluation purposes is 10%.
Reference: 12-19
What was the Consumer Products Division's minimum required return in May?
A) $81,300
B) $8,130
C) $88,130
D) $80,000
Feedback:
AACSB: Analytic
AICPA BB: Critical Thinking
AICPA FN: Reporting
LO: 3
Level: Easy
Points Earned:
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5.0/5.0
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|
Correct Answer(s):
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D
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2.
Residual income is:
A) Net operating income plus the minimum required return on average operating assets.
B) Net operating income less the minimum required return on average operating assets.
C) Contribution margin plus the minimum required return on average operating assets.
D) Contribution margin less the minimum required return on average operating assets.
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