Guardian Corporation Has Two Major Divisions- Healthcare Products and Pharmaceutical

question 56

Multiple Choice

Guardian Corporation has two major divisions- Healthcare Products and Pharmaceutical Products.It provides the following information for the year. $$\begin{array} { | l | l | l | } \hline & \text { Healthcare Division } &{ \begin{array} { c } \text { Pharmaceutical } \\\text { Division }\end{array} } \\\hline \text { Net sales } & \$ 160,000 & \$ 1,750,000 \\\hline \text { Operating income } & \$ 46,000 & \$ 218,000 \\\hline \text { Average assets } & \$ 320,000 & \$ 5,540,000 \\\hline \text { Target rate of return } & 12,0 \% & 12,0 \% \\\hline\end{array}$$ Calculate the residual income for the Healthcare Division.

• A) $26,800
• B) $7600
• C) $114,000
• D) $46,000

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Definitions:

Households

Units of residence in an economy that include all individuals who live together and make joint economic decisions.

Goods And Services

The output produced by economic activities, encompassing tangible products (goods) and intangible items (services).

Different Utilities

Various measures of satisfaction or usefulness that consumers derive from goods and services, taking forms like marginal, total, and consumer surplus.

Laundry

The action or process of washing clothes and linens.