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A manufacturer reports the following for two of its divisions for a recent month. Beverage Division Cheese Division Average assets $ 7,600 $ 13,900 Sales

A manufacturer reports the following for two of its divisions for a recent month.

	Beverage Division	Cheese Division
Average assets	$ 7,600	$ 13,900
Sales	3,390	5,520
Income	834	1,190

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Assume that each of the company's divisions has a target income at 7% of average assets. Compute residual income for each division. Target Income Beverage Cheese Targeted return Target income Residual Income Beverage Cheese Residual income

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