Presented below is information related to the San Diego Division of Lumber, Inc. Contribution margin .... $1,200,000

Question:

Presented below is information related to the San Diego Division of Lumber, Inc.

Controllable margin .... $ 800,000

Average operating assets ... $3,200,000

Minimum rate of return ..... 16%

Compute the San Diego’s return on investment and residual income.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...