Division Q makes a single product. Information for the division for the year just ended it:
|
Sales |
30 000 units |
|
Fixed costs |
£487 000 |
|
Depreciation |
£247 500 |
|
Residual income |
£47 200 |
|
Net asset |
£1 250 000 |
Head office assesses divisional performance by the residual income achieved. It uses a cost of capital of 12% a year.
Division Q’s average contribution per unit was
A £14.82
B £22.81
C £28.06
D £31.06
E £32.81