Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 8

What are the components of residual income (RI)?

Step 1 of 2

The primary goal of most of the business organization is to maximize profit. Now, managers have different approach and strategies to measure the achievement towards this goal. Residual income is commonly known as RI. It is calculated by subtracting imputed charge for investment made from income.