The West Division of Frede Corporation Had Average Operating Assets

Multiple Choice

The West Division of Frede Corporation had average operating assets of $700,000 and net operating income of $120,800 in December. The minimum required rate of return for performance evaluation purposes is 16%.
-What was the Consumer Products Division's residual income in August?

A) $3,870
B) $6,300
C) $(3,870)
D) $(6,300)