7

The following selected data pertain to Beck Co.?s Beam Division for last year: Sales $2,000,000 Variable expenses $800,000 Traceable fixed expenses $900,000 Average operating assets $500,000 Minimum required rate of return 20% Note: the traceable fixed expenses do not include any interest expense. How much is the residual income? $400,000 $200,000 S300000 $500,000