Flexible Budget Application The polishing department of Taylor Manufacturing Company operated during April 2016 with the following manufacturing overhead cost budget based on 5,000 hours of monthly productive capacity:

Return on Investment and Residual Income The Emergency Medical Services Company has two divisions that operate independently of one another. The financial data for the year 20x5 reported the following results: North South Sales $3,720,000 $3,220,000 Operating income 930,000 730,000 Taxable income 785,000 510,000 Investment 6,000,000 5,000,000 The company's desired rate of return is 10%. Income is defined as operating income. a. What are the respective return-on-investment ratios for the North and South divisions? Round ROI to the nearest whole percentage. ROI North 96 South 96 b. What are the respective residual incomes of the North and South divisions? Residual Income North $ South $ c. Which division has the better return on investment and which division has the better residual income figure? Return on investment Residual income