What residual income and return on investment for scotch

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Scotch Co. has the following results for the year:

Sales P740,000

Variable expenses 260,000

Fixed expenses 300,000

Question 1: Total divisional assets average P1,000,000. The companys minimum required rate of return is 14 percent. The residual income and return on investment for Scotch are:

                                           A.                              B.                         C.                          D.

Residual Income            P36,000                   P40,000                    P36,000                P40,000

Return on Investment            36%                          18%                     18%                        36%

Reference no: EM132576828

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