Assume you are the management accountant for the Foleo Group, and nine months ago you helped Tracey Chen introduce a performance measurement system across the organisation based on ROI as the sole measure.Tracey has now asked you to assist her in assessing the effectiveness of the new system since its introduction for each of the business units and H.O. Departments.To begin the process, she asks you to analyse the Foleo Accessories business - Tracey is quietly confident that performance has improved, considering the bonus payments across the business unit have been paid out each month since the system was implemented.You collect the data you need for your analysis of the performance of Foleo Accessories for the last nine months, compared with the same period last year, and compile it on the document below.

Foleo Accessories Comparison Performance Report for 9 months:

Last 9 months

Same period last year

Sales Revenue:

$1,609,875

$1,685,818

Variable Costs

$998,123

$1,005,823

CONTRIBUTION MARGIN OF FOLEO ACCESSORIES

$611,752

$679,995

Less:Controllable Fixed Expenses

$62,785

$62,412

PROFIT MARGIN CONTROLLABLE BY FOLEO ACCESSORIES

$548,967

$617,583

Less:Traceable Fixed Expenses

$217,333

$216,570

PROFIT MARGIN TRACEABLE TO FOLEO ACCESSORIES

$331,634

$401,013

Less:Common Fixed Expenses

$45,000

$45,000

NET PROFIT BEFORE TAX

$286,634

$356,013

Extract from Foleo Accessories Balance Sheet Comparison:

Current

Same period last year

Assets:

Current Assets

$1,672,145

$2,505,129

Fixed Assets

$4,277,208

$5,132,650

TOTAL ASSETS

$5,949,353

$7,637,779

Liabilities:

Current Liabilities

$1,070,674

$1,071,384

Long term Liabilities

$3,150,000

$3,300,000

TOTAL LIABILITIES

$4,220,674

$4,371,384

Q.From your analysis above, brief report for Tracey Chen explaining the ROI results in relation to the Performance Report and Balance Sheet extract, and recommending a course of action.