As the Staff Accountant for Investment Centers Beta and Gamma,compute

question 112

Essay

As the staff accountant for Investment Centers Beta and Gamma,compute the residual income for each investment center,using the following information:
$\begin{array}{lrr} & \text { Beta } & \text { Gamma } \\\text { Operating income } & \$ 850,000 & \$ 1,000,000 \\\text { Actual ROI } & 28 \% & 49 \% \\\text { Desired ROI } & 32 \% & 35 \% \\\text { Assets invested } & \$ 585,000 & \$ 750,000 \\\end{array}$

---

Definitions:

Purchasing Cycle

The sequence of steps or processes involved in the acquisition of goods or services, from the identification of a need, through the procurement process, to the payment of the invoice.

Purchase Order

A formal document issued by a buyer to a seller, detailing the products or services ordered and the agreed-upon prices.

Inventory Account

An account in the general ledger that tracks the value of a company's products that are intended for sale.

Time Sheet

A document or tool used to track the number of hours worked by an employee during a specific period.