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    Milano Corporation three divisions performance calculation

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    Milano Corporation has three operating divisions and requires a 12% rreturn on all investments. Selected information is presented here:

    a. Calculate the missing amounts for each division.
    b. Comment on the relative performance of each division.
    c. Provide an example to show how residual income improves decision making at the division level

    Division A Division B Division C
    Revenues........ $500,000 ? ?
    Operating Income $60,000 ? $80,000
    Operating Assets $250,000 $600,000 ?
    Margin ? 12% ?
    Turnover ? 1turn 2 turns
    ROI ? ? ?
    Residual Income ? ? $20,000

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    Solution Summary

    Milano corporation three divisions
    Residual income