Reference: 12-02
the Following Data Are Available for the South

Multiple Choice

Reference: 12-02
The following data are available for the South Division of Redride Products, Inc. and the single product it makes: $$\begin{array} { | l | l | } \hline \text { Unit selling price } & \$ 20 \\\hline \text { Variable cost per unit } & \$ 12 \\\hline \text { Annual fixed costs } & \$ 280,000 \\\hline \text { Average operating assets } & \$ 1,500,000 \\\hline\end{array}$$
-If the South Division wants a residual income of $50,000 and the minimum required rate of return is 10%, the annual turnover will have to be?

A) 0.80.
B) 0.32.
C) 1.25.
D) 1.50.