Reference no: EM133147081

Question - Household Brands Incorporated (HBI) manufactures household goods in the United States. The company made two acquisitions in previous years to diversify their product lines. In 2011, HBI acquired cosmetics and consumer electronics companies.

HBI is now, in 2022, comprised of three divisions: cosmetics, household, and consumer electronics. The following information (in thousands of dollars) presents operating revenues, operating income, and invested assets of the company over the last three years:

	Revenue	Operating Income	Assets
Cosmetics
2020	$26,100	$1,900	$9,400
2021	20,100	1,800	9,100
2022	17,800	1,400	9,310
Household
2020	15,500	1,800	7,510
2021	14,300	1,000	7,100
2022	9,900	930	6,290
Electronics
2020	13,700	1,600	4,480
2021	9,540	1,000	4,000
2022	8,760	910	4,200
Household Brands Total
2020	55,300	5,300	21,390
2021	43,940	3,800	20,200
2022	36,460	3,240	19,800

The current compensation package is an annual bonus award. The senior executives share in the bonus pool. The pool is calculated as 20% of the annual residual income of the company.

The residual income is defined as operating income minus a cost of capital charge of 15% of invested assets.

Required - Find the total amount of the bonus pool for 2022?