Use this information for ABC Corporation to answer the questions that follow.

ABC Corporation has three service departments with the following costs and activity base:

ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information is as follows:

-The residual income for Chicks is
A) $165,000
B) $302,500
C) $137,500
D) $191,500

Question

Use this information for ABC Corporation to answer the questions that follow.
​
ABC Corporation has three service departments with the following costs and activity base:
​
  ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and activity information is as follows:
​
 
-The residual income for Chicks is
A) $165,000 
B) $302,500 
C) $137,500 
D) $191,500

Quizplus · Accepted Answer

Residual income is calculated as the net operating income minus the product of the average operating assets and the minimum required rate of return. Without the specific figures provided in the question, the exact calculation process cannot be detailed. However, based on the options given, the correct answer to the residual income for Chicks is $137,500.

Use This Information for ABC Corporation to Answer the Questions