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Amount of annual fixed costs

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Reference no: EM132799723

Assume the unit selling price is RM132 and that ABC company has a 16% imputed interest charge. Top management will promote Rachael to corporate headquarters if her division can generate RM200,000 of residual income. If Rachael desires to move to corporate, what must the division do to the amount of annual fixed costs incurred? Show your calculations.

Average invested capital: RM15,000,000

Annual fixed costs: RM3,900,000

Variable cost per unit: RM80

Number of units expected to be sold: 120,000

Reference no: EM132799723

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