1. The Consumer Products Division of Goich Corporation had average operating assets of $800,000 and net operating income of $81,300 in May. The minimum required rate of return for performance evaluation purposes is 10%



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1.

The Consumer Products Division of Goich Corporation had average operating assets of $800,000 and net operating income of $81,300 in May. The minimum required rate of return for performance evaluation purposes is 10%.

Reference: 12-19

What was the Consumer Products Division's minimum required return in May?



A) $81,300 
B) $8,130 
C) $88,130 
D) $80,000 

Feedback: 

AACSB: Analytic

AICPA BB: Critical Thinking

AICPA FN: Reporting

LO: 3

Level: Easy

Points Earned:

5.0/5.0




Correct Answer(s):

D



2.

Residual income is:



A) Net operating income plus the minimum required return on average operating assets. 
B) Net operating income less the minimum required return on average operating assets. 
C) Contribution margin plus the minimum required return on average operating assets. 
D) Contribution margin less the minimum required return on average operating assets. 


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