Don't give answer in image format Sheridan Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Eachdistribution channel is evaluated as an investment center. Selected results from the latest year are as follows:Sales revenueVariable expensesDirect fixed expensesAverage assetsRequired rate of returnRetail Stores Internet Catalog Sales$10,070,000 $4,020,0004,020,0001,570,0004,520,0001,070,0008,020,0004,020,00010%10%$3,280,0001,870,0001,270,0001,660,00010% (b)The corporate office is giving the managers of each channel the option of a customer relationship management system that willallow the managers to gather data about their customers and be more effective in their marketing efforts. The system will cost$870,000 and is expected to generate $162,000 in additional annual segment margin.Calculate the residual income of each distribution channel assuming it purchases the new customer relationship managementsystem. (If the residual income is a loss then enter with a negative sign preceding the number, eg. -5,125 or parenthesis, e.g. (5,125))RetailOnlineCatalogResidual Income

Note : Residual Income = Net operating income - Return required

Sheridan Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Sales revenue Variable expenses Direct fixed expenses Average assets Required rate of return Retail Stores Internet $10,070,000 $4,020,000 4,020,000 1,570,000 4,520,000 1,070,000 8,020,000 4,020,000 10% 10% Catalog Sales $3,280,000 1,870,000 1,270,000 1,660,000 10%

Sheridan Decor sells home decor items through three distribution channels-retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Sales revenue Variable expenses Direct fixed expenses Average assets Required rate of return Retail Stores Internet $10,070,000 $4,020,000 4,020,000 1,570,000 4,520,000 1,070,000 8,020,000 4,020,000 10% 10% Catalog Sales $3,280,000 1,870,000 1,270,000 1,660,000 10%

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter21: Variable Costing For Management analysis

Section: Chapter Questions

Problem 15E

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