Wexford Co. has a subunit that reported the following data for Year 1: Asset (investment) turnover: 1.5

Question:

Wexford Co. has a subunit that reported the following data for Year 1: Asset (investment) turnover: 1.5 times
Sales: $750,000
Return on sales: 8%
The imputed interest rate is 12%. What is the division residual income for Year 1?
a. $60,000
b. $30,000
c. $20,000
d. $0