Calculate the current residual income for each distribution

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Question - Sheridan Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows:

 

Retail Stores

Internet

Catalog Sales

Sales revenue

$10,070,000

$4,020,000

$3,280,000

Variable expenses

4,020,000

1,570,000

1,870,000

Direct fixed expenses

4,520,000

1,070,000

1,270,000

Average assets

8,020,000

4,020,000

1,660,000

Required rate of return

10%

10%

10%

Required - Calculate the current residual income for each distribution channel.

Reference no: EM133183315

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