Problem 1

Questions 1 through 5 are based on OSO CO.'s industrial print finishing division, Rho, which incurred the following costs and expenses in 2020:

variable fixed

Direct materials 200,000

Direct labor 150,000

Factory overhead 70,000 42,000

General, selling and administrative 30,000 48,000

TOTAL 450,000 90,000

During 2020, Rho produced 300,000 units of industrial prints, which were sold for P2.00 each.Oso's investment in Rho was P500,000 and P700,000 at January 1, 2020, and December 31, 2020, respectively.Oso normally imputes interest on investments at 15% of average invested capital.

1. For the year ended December 31, 2020, Rho's return on average investment was ____.

2. For the year ended December 31, 2020, Rho's residual income (loss) was_____.

Show your solution.