Safety Seats Co. recorded operating data for its shoe division for the year. The company's desired ROI is 5%.
|
Sales
|
$500,000
|
|
Variable costs
|
400,000
|
|
Contribution margin
|
100,000
|
|
Total direct fixed costs
|
60,000
|
|
Average total operating assets
|
200,000
|
What is the residual income?
1. $20,000
2. $30,000
3. $40,000
4. $90,000
5. $100,000