The Performance of the Manager of Division a Is Evaluated

question 18

Multiple Choice

The performance of the manager of Division A is evaluated by residual income.Which of the following would improve the manager's performance?

• A) Increase in average operating assets.
• B) Decrease in average operating assets.
• C) Increase in minimum required return.
• D) Decrease in operating income.

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Definitions:

Planning Budget

A financial plan that estimates future revenues, expenses, and other financial needs for a specific period.

Customers Served

The total number of clients or customers that a business or facility has provided services or goods to within a specific period.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels within a business.

Customers Served

The number of individual clients or customers that a business has provided products or services to within a specific timeframe.