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Forchen, Inc., provided the following information for two of its divisions for last year:
Small Appliances Division Cleaning Products Division
Sales $34,670,000 $31,320,000
Operating income 2,773,600 1,252,800
Operating assets, January 1 6,394,000 5,600,000
Operating assets, December 31 7,474,000 6,000,000
Forchen, Inc., requires an 8 percent minimum rate of return.
Required:
a. Calculate residual income for the Small Appliances Division.
b. Calculate residual income for the Cleaning Products Division.
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Forchen, Inc., provided the following information for two of its divisions for last year:
Small App...
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