Hysong Corporation Uses Residual Income to Evaluate the Performance of Its

question 5

Essay

Hysong Corporation uses residual income to evaluate the performance of its divisions. The minimum required rate of return for performance evaluation purposes is 11%. The Games Division had average operating assets of $530,000 and net operating income of $56,200 in June.
Required:
What was the Games Division's residual income in June?

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Definitions:

Savant Syndrome

A condition where a person with significant mental disabilities demonstrates certain abilities far in excess of average.

Abstract Concepts

Ideas that do not have a physical, tangible reality and are often complex, such as justice, love, or freedom.

Factor Analysis

A statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors.

Flynn Effect

The observed rise over time in standardized intelligence test scores, attributed to various factors such as improved nutrition, education, and environment.