Dartford Company reported the following financial data for one of its divisions for the year; average investment center total assets of

 Dartford Company reported the following financial data for one of its divisions for the year; average investment center total assets of $3,800,000; investment center income $655,000; a target income of 12% of average invested assets. The residual income for the division is:

Multiple Choice

$1,111,000.


$534,600.


$576,400.


$733,600.


$199,000 Correct
 

Explanation
Target investment center income = $3,800,000 × 12% = $456,000
$655,000 − $456,000 = $199,000