Earl Oil Change operates two divisions. The following pertains to each division for 2011: Required a. Compute

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Earl Oil Change operates two divisions. The following pertains to each division for 2011:

New York New Jersey Sales $1,200,000 $ 90,000 $300,000 15% $1,000,000 $ 60,000 $240,000 Operating income Average operati

Required
a. Compute each division's residual income.
b. Which division increased the company's profitability more?

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Fundamental Managerial Accounting Concepts

ISBN: 978-0078110894

6th Edition

Authors: Edmonds, Tsay, olds

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Question Posted: Dec 07, 2011 05:22 AM

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Earl Oil Change operates two divisions. The following pertains to each division for 2011: Required a. Compute

Question:

New York New Jersey Sales $1,200,000 $ 90,000 $300,000 15% $1,000,000 $ 60,000 $240,000 Operating income Average operating assets Company's desired rate of return 15%

Step by Step Answer:

a New York Division Residual income 90000 15 x 300000 45000 New ...View the full answer

Fundamental Managerial Accounting Concepts

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