Question
Wintertime Inc. reported the following operating results for its three divisions: Parkas, Scarfs, and Gloves. Parkas Scarfs Gloves Sales $600,000 $500,000 $300,000 Net operating income
Wintertime Inc. reported the following operating results for its three divisions: Parkas, Scarfs, and Gloves.
|
| Parkas | Scarfs | Gloves |
| Sales | $600,000 | $500,000 | $300,000 |
| Net operating income | $150,000 | $120,000 | $60,000 |
| Ave. divisional operating assets | $750,000 | $600,000 | $400,000 |
Which divisions residual income would be considered as being the least favorable if Wintertime Inc.s minimum required return on investments is 12% for all divisions.
Scarfs Division
Parkas Division
Gloves
The residual income is the same for all three divisions.
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Teaching Calculation Audit And Test
Authors: Richard English
1st Edition
144627277X, 978-1446272770
