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Milano Corporation three divisions performance calculation

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

Solution Summary

Milano corporation three divisions
Residual income