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Safety Seats Co. recorded operating data for its shoe division for the year. The company's desired ROI is 5%.
Sales
$500,000
Variable costs
400,000
Contribution margin
100,000
Total direct fixed costs
60,000
Average total operating assets
200,000
What is the residual income?
1. $20,000
2. $30,000
3. $40,000
4. $90,000
5. $100,000
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