aInvestment centerbInvestment centercRevenue centerdProfit centereCost center
Margin = Operating Income / SalesTurnover = Sales / Average Operating AssetsReturn on Investment (ROI) = Margin x TurnoverPart 1Year 1Year 2Operating Income*givenSales*givenMargin (Operating Income / Sales)Sales*givenAverage Operating Assets*givenTurnover (Sales / Average Operating Assets)Part 2Return on Investment (ROI) [Margin x Turnover]
Residual Income = Operating income - (Minimum rate of return x Average operating assets)Part 1Operating incomeMinimum rate of returnAverage operating assetsResidual incomePart 2Was the ROI for the Tuxedo Division greater than, less than, or equal to 7 percent?
Part 1Who set the maximum transfer price?Who set the minimum transfer price?