1. Explain the purpose of a management control system in an organization. 2. Good performance measures are useful in an organization in several ways. Explain how they can be useful. 3. Distinguish between a cost center, a profit center and an investment center. 4. The Bottlebrush Company has income from operations of $60,000, invested assets of $345,000, and sales of $786,000. Use the DuPont formula to calculate the rate of return on investment, and show (a) the profit margin, (b) the investment turnover, and (c) rate of return on investment. 5. Jupiter design Limited specializes in providing design services to residential developers. Last year the company had net operating income of $600,000 on sales of $3,000,000. The company's average operating assets for the year were $2,800,000 and its minimum required rate of return was 18%. Required: Compute the company's residual income for the year. 6. The Magnolia Company Division A has income from operations of $80,000 and assets of $400,000. The minimum acceptable rate of return on assets is 14%. What is the residual income for the division? 7. Using the data from the Tomato Industries, determine the divisional income from operations for Districts 1 & 2. Allocate service department expenses proportional to the sales of each district. District 1 District 2 Sales $300,000 $600,000 Cost of goods sold 120,000 150,000 Selling expenses 55,000 75,000 Service department expenses Purchasing $70,000 Payroll accounting 80,000 8. Bentz Co. has two divisions, A and B. Invested assets and condensed income statement data for each division for the past year ended December 31 are as follows: Division A Division B Revenues $190,000 Operating expenses $125,500 1 12,500 Service department charges 92, 750 29,500 Invested assets 12,625 Required: 225,000 99,000 a) Prepare condensed income statements for the past year for each division. b) Using the expanded expression, determine the profit margin, investment turnover, and rate of return on investment for each division