22. The Pathways Company has an asset turnover of 3 times, using assets of $50,000. The company also has a return on investment (ROI) of 17%. If the residual income was $3,750, what was the company's cost of capital?

7.5%.

9.5%.

17.0%.

2.0%.

23. Great Falls Company makes two products, Wool Gloves and Wool Mittens. They are initially processed from the same raw material and then, after split-off, further processed separately. Additional information is as follows:

	Gloves			Mittens			Total
Final Sales Price	$	12,300		$	9,630		$	21,930
Joint Costs Prior to Split-Off Point		?			?			8,238
Costs Beyond Split-Off Point	$	4,100		$	4,100		$	8,200

What are the joint costs allocated to Gloves and Mittens assuming Great Falls uses the estimated net realizable value approach?

	Gloves				Mittens
A.	$	4,119			$	4,119
B.	$	4,480			$	3,758
C.	$	4,920			$	3,318
D.	$	5,080			$	3,158

Option D

Option B

Option C

Option A

24. Use the following information to compute residual income:

Sales	$	327,000
Operating income	$	56,500
Average current assets	$	257,000
Cost of capital		8	%
Return on investment		10	%

$32,700.

$30,800.

$20,560.

$11,300.