The Consumer Products Division of Mickolick Corporation Had Average Operating

question 9

Multiple Choice

The Consumer Products Division of Mickolick Corporation had average operating assets of $450,000 and net operating income of $38,700 in August. The minimum required rate of return for performance evaluation purposes is 10%. What was the Consumer Products Division's residual income in August?

• A)$3,870
• B)$6,300
• C)($3,870)
• D)($6,300)

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Definitions:

Building Site

A piece of land that has been chosen or is being used for constructing a building or structure.

Allocated

The process of apportioning expenses, incomes, or resources among various accounts or departments.

Plant Assets

Enduring physical assets utilized in a business's operations, which are not expected to be sold.

Land Improvements

Enhancements made to a piece of land to increase its value or usability, such as landscaping, fencing, and adding utilities.