Reference: 12-02
the Following Data Are Available for the South

question 60

Multiple Choice

Reference: 12-02
The following data are available for the South Division of Redride Products, Inc. and the single product it makes: $$\begin{array} { | l | l | } \hline \text { Unit selling price } & \$ 20 \\\hline \text { Variable cost per unit } & \$ 12 \\\hline \text { Annual fixed costs } & \$ 280,000 \\\hline \text { Average operating assets } & \$ 1,500,000 \\\hline\end{array}$$
-If the South Division wants a residual income of $50,000 and the minimum required rate of return is 10%, the annual turnover will have to be?

• A)0.80.
• B)0.32.
• C)1.25.
• D)1.50.

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Definitions:

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