Sheridan Hospital provided the following segment margin income statements for two of its divisions Diagnostic and...
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Sheridan Hospital provided the following segment margin income statements for two of its divisions Diagnostic and Outpatient. Both divisions are structured as investment centers. Revenue Variable expenses Product Selling and administrative Contribution margin Less traceable fixed costs Segment margin Common fixed costs Net operating income Diagnostic $ 527,000 227,000 157,000 143,000 89,000 Outpatient $427,000 147,000 87,000 193,000 100,000 $ 54,000 $ 93,000 Calculate the current residual income for each division. Total $ 954,000 $ 374,000 244,000 336,000 189,000 147,000 137,000 10,000 The average assets for the Diagnostic and Outpatient divisions total $407,000 and $607,000, respectively. The required minimum rate of return for both divisions is 10%. Sheridan Hospital provided the following segment margin income statements for two of its divisions Diagnostic and Outpatient. Both divisions are structured as investment centers. Revenue Variable expenses Product Selling and administrative Contribution margin Less traceable fixed costs Segment margin Common fixed costs Net operating income Diagnostic $ 527,000 227,000 157,000 143,000 89,000 Outpatient $427,000 147,000 87,000 193,000 100,000 $ 54,000 $ 93,000 Calculate the current residual income for each division. Total $ 954,000 $ 374,000 244,000 336,000 189,000 147,000 137,000 10,000 The average assets for the Diagnostic and Outpatient divisions total $407,000 and $607,000, respectively. The required minimum rate of return for both divisions is 10%.
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Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
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