For Echuca Ltd Sales Are $1 500 000, Profit Is

question 62

Multiple Choice

For Echuca Ltd sales are $1 500 000, profit is $90 000, invested capital is $450 000 and the interest rate is 8 per cent. What is the residual income for the year?

• A) ($30 000)
• B) $54 000
• C) $82 800
• D) $36 000

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Definitions:

Book Value

The net value of a company's assets minus its liabilities, often used to evaluate a company's worth.

Joint Costs

The costs that are incurred from producing two or more products in the same process.

Split-Off

A point in the manufacturing process where joint products are separated and continue through the production process as distinct items.

Sales Margin

The difference between the selling price of a product and its cost of sales, usually represented as a percentage of sales.