Huntswell Corporation Has Two Major Divisions: Agricultural Products and Industrial

Multiple Choice

Huntswell Corporation has two major divisions: Agricultural Products and Industrial Products. It provides the following information for the year 2014 $$\begin{array} { | l | c | c | } \hline & \text { Agriculture Division } & \text { Industrial Division } \\\hline \text { Sales revenue } & \$ 140,000 & \$ 1,040,000 \\\hline \text { Operating income } & \$ 46,400 & \$ 220,000 \\\hline \text { Average total assets } & \$ 300,000 & \$ 5,540,000 \\\hline \text { Target rate of return } & 14,0 \% & 14,0 \% \\\hline\end{array}$$ Calculate the residual income for the Agriculture division.

A) $5,500
B) $4,400
C) $2,500
D) $1,800