q show the example on residual incomedivision a

Question

Q. Show the example on residual income?

Division A makes and sells a single product and is assessed by the residual income it earns, the head office of the group uses a 10% cost of capital. 

Forecast information: 

Sales                                                 50000 units

Variable cost per unit                           £5

Fixed cost                                         £45,000

Depreciation                                     £23,500

Net assets                                         £360,000

What price must division A charge to earn a residual income of £64,700?