Exercise 24-20 Presented below is selected information for three regional divisi

Question

Exercise 24-20 Presented below is selected information for three regional divisions of Medina Company North $299,600 West South Contribution margin Controllable margin Average operating assets Minimum rate of retum $399,300 $140,300 $360,300 $209,000 $935,333 $2,001,667 $1,393,333 11% 14% 9 96 Compute the return on investment for each division. (Round ROI to 0 decimal places, e-g. 15.) North Division West Division South Division Compute the residual income for each division. (Round final answers to 0 decimal places, e.g. 1,255.) North Division West Division South Division

Explanation / Answer

ROI North Division 15 % (140300/935333)*100 West Division 18 % (360300/2001667)*100 South Division 15 % (209000/1393333)*100 ROI Controllabl margin/Avg opertaing assets*100 Residual Income North Division 37389 140300-(935555*11%) West Division 80067 360300-(2001667*14%) South Division 83600 209000-(1393333*9%)

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