1.2.

Assume a company reported the following results: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets $400,000 260,000 140,000 40,000 $100,000 $400,000 If the company's minimum required rate of return on average operating assets is 16%, its residual income would be: Assume a company has only one service department and two operating departments (A and B). The service department's budgeted and actual variable costs for the period were $80,000 and $88,000, respectively. The budgeted and actual units of service provided to the operating departments were as follows: Department A Department B Total Budgeted Units of Service 16,000 24,000 40,000 Actual Units of Service 16,000 26,000 42,000 How much of the service departments variable costs should not be charged to either Department A or B