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1. Accounting records from Division A, Alpha Manufacturing Company indicate the following: Divisional Sales Average investment Divisional operating income Minimum rate of return RM 1,500,000
1. Accounting records from Division A, Alpha Manufacturing Company indicate the following: Divisional Sales Average investment Divisional operating income Minimum rate of return RM 1,500,000 RM 1,000,000 RM 169,500 14% Required: a) Compute the return on sales (ROS) for Division A. (Round answer to one decimal place.) b) Compute the asset turnover (AT) for Division A. c) Compute return on investment (ROI) for this division, using answers to parts (1) and (2). d) Compute residual income (RI) for Division A. e) Describe how Alpha Manufacturing would determine whether or not to invest in any particular project in the future. (Total: 16 MARKS)
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