Question

please how you find out Net operating income in the third column. i have problem in the third column only, thanks

I GOT THE ANSWER THANKS. PLEASE don't count it as an answer

Sales	$      470,000		$      660,000		$      530,000
Net operating income	$         31,400		$         52,000		$        26,440
Average operating Assets	$      157,000		$      325,000		$      146,000
Return on investment ROI	20%	%	16%	%	18%
Minimum required rate of return
Porcentage	12%	%	16%	%	14%
Dollar amount	$         18,840		$         52,000		$                 -
Residial income	$         12,560		$                 -		$ 6000 -

  

Managerial Account  

Answer 1

The net operating income is an information given in the question. It cannot be worked out
without details of revenues and costs.
However, the calculations for the metrics are shown in the table below:
Sales	$         470,000	$            660,000	$        530,000
Net operating income	$            31,400	$              52,000	$          20,440
Average operating assets	$         157,000	$            325,000	$        146,000
CALCULATIONS:
Return on investment [Net operating income/Average operating assets]	20.00%	16.00%	14.00%
Minimum required rate of return:
Percentage [given]	12.00%	16.00%	14.00%
Dollar amount [Average operating assets*Minimum required rate of return]	$            18,840	$              52,000	$          20,440
Residual income [Net operating income-Minimum required dollar income]	$            12,560	$                        -	$                   -