Managerial Accounting (15th Edition)

by Garrison, Ray; Noreen, Eric, Brewer, Peter

Published by McGraw-Hill Education

ISBN 10: 007802563X

ISBN 13: 978-0-07802-563-1

Chapter 11 - Performance Measurement in Decentralized Organizations - The Foundational 15 - Required - Page 499: 14

Answer

Yes she would do it.

Work Step by Step

Last year residual income = $200 000 - (0.15 \times 625 000) = 106 250$ This year's opportunity residual income = $30 000 - (0.15 \times 120 000) = 12 000$ Then new RI = $118,250$ (sum of both)

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