1. Management of XMart Department Stores wanted to know how well the jewelry department was performing based on the following information:

   Average operating assets	$700,000
   Controllable margin	90,000
   Contribution margin	120,000
   Minimum rate of return	10%

   How much is XMart's residual income?

   $50,000

   $30,000

   $20,000

   12,000