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### Horngren'S Financial And Managerial Accounting

Book edition 6th
Author(s) Tracie L. Miller-Nobles, Brenda L. Mattison
Pages 992 pages
ISBN 9780134486833

# Refer to the information in Short Exercise S24-7. Compute each division’s RI. Interpret your results. Are your results consistent with each division’s ROI?

The residual income of Snow Sports is $457,000 and for non-snow sports is$737,000. Both the divisions have positive residual income.

See the step by step solution

## Step 3 Interpretation of results

As computed in step 1 it is clearly visible that both the divisions have positive residual income. This means that the division is income at a rate that is more than the expectations of the management’s minimum expectations.