Evaluate the residual income

Reference no: EM139790

Safety Seats Co. recorded operating data for its shoe division for the year. The company's desired ROI is 5%.

Sales	$500,000
Variable costs	400,000
Contribution margin	100,000
Total direct fixed costs	60,000
Average total operating assets	200,000

What is the residual income?

1. $20,000

2. $30,000

3. $40,000

4. $90,000

5. $100,000

Reference no: EM139790

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