B. Residual income is equal to net income before taxes minus target return in dollars (a % of assets or invested capital). Invested capital is equal to the sum of working capital and plant and equipment or $19,000,000 ($1,800,000 + $17,200,000). Hence, the imputed interest charge is equal to $2,850,000 ($19,000,000 × 15%). Net income needs to be equal to the sum of the imputed interest charge and the amount of residual income, or $4,850,000 ($2,850,000 + $2,000,000). Thus, costs are equal to the revenue minus net income or $25,150,000 (30,000,000 - $4,850,000).

C. See the correct answer for a complete explanation.

D. See the correct answer for a complete explanation.