quinn company has two divisions domestic and international invested assets and conde 666061

Quinn Company has two divisions, Domestic and International. Invested assets and condensed income statement data for each division for the past year ended December 31 are as follows:

	Domestic Division	International Division
Revenues	$675,000	$480,000
Operating expenses	450,000	372,400
Service department charges	90,000	50,000
Invested assets	600,000	384,000

Instructions

1. Prepare condensed income statements for the past year for each division.

2. Using the DuPont formula, determine the profit margin, investment turnover, and rate of return on investment for each division.

3. If management’s minimum acceptable rate of return is 10%, determine the residual income for each division.