12.

Carmon Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 700 units. The costs and percentage completion of these units in beginning inventory were:

	Cost		Percent Complete
Materials Costs	$	16,700	90%
Conversion Costs	$	9,500	60%

A total of 7,400 units were started and 6,300 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

Materials Costs	$	171,800
Conversion Costs	$	137,400

The ending inventory was 75% complete with respect to materials and 40% complete with respect to conversion costs. Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.

How many units are in ending work in process inventory in the first processing department at the end of the month?

1,000

1,800

1,100

6,700

22. Financial data for Redstone Company for last year appear below:

Redstone Company Statements of Financial Position
	Beginning Balance		Ending Balance
Assets:
Cash	$	308,000	$	246,245
Accounts receivable		131,000		164,000
Inventory		325,000		256,000
Plant and equipment (net)		460,000		453,000
Investment in Balsam Company		243,000		312,000
Land (undeveloped)		300,000		300,000
Total assets	$	1,767,000	$	1,731,245
Liabilities and owners equity:
Accounts payable	$	168,000	$	145,000
Long-term debt		809,000		809,000
Owners equity		790,000		777,245
Total liabilities and owners equity	$	1,767,000	$	1,731,245

Redstone Company Income statement
Sales			$	1,780,000
Less operating expenses				1,450,700
Net operating income				329,300
Less interest and taxes:
Interest expense	$	93,800
Tax expense		115,255		209,055
Net income			$	120,245

The company paid dividends of $133,000 last year. The "Investment in Balsam Company" on the statement of financial position represents an investment in the stock of another company.

Required:
a.	Compute the company's margin, turnover, and return on investment for last year. (Round your intermediate calculations and final answers to 2 decimal places.)

b.	The Board of Directors of Redstone has set a minimum required return of 25%. What was the company's residual income last year? (Round your intermediate calculations and final answers to 2 decimal places.)