Bright Kitchen Company is a business with stores located in Samarahan and Kuching. The business sells a wide range of kitchen appliances such as rice cooker, oven, refrigerator, dishwasher and accessories. Financial details for the past year are presented below: Total Sales Revenue Variable costs Contribution margin Less store-specific fixed costs Samarahan $ 226,500 (149,900) 76,600 (58,600) 18,000 (37,800) (19,800) Kuching $ 878,600 (528,200) 350,400 (119,700) 230,700 (88,200) 142,500 $ 1,105,100 (678,100) 427,000 (178,300) 248,700 (126,000) 122,700 Less Share of corporate costs Store profit Cost of capital 5% Investment 119,000 281,000 400,000 The management accountant has prepared the above information and must explain the difference in performance across the two stores to the owner. All inventory is purchased by the head office. There is no difference in cost price of inventory between stores, but delivery costs may vary. The owner has a policy of ensuring the selling price is consistent between stores. Required: a) Calculate the return on investment (ROI) for each of the two stores. (2 marks) b) Calculate the residual income (RI) for each of the two stores. (2 marks) c) Discuss the performance of the Kuching store in comparison to the Samarahan store based on absolute profit and your calculations of ROI and RI. (3 marks) d) The management accountant is concerned that the owner will see the results and want to close the Samarahan store. Explain whether you agree with that suggestion. Bright Kitchen Company is a business with stores located in Samarahan and Kuching. The business sells a wide range of kitchen appliances such as rice cooker, oven, refrigerator, dishwasher and accessories. Financial details for the past year are presented below: Total Sales Revenue Variable costs Contribution margin Less store-specific fixed costs Samarahan $ 226,500 (149,900) 76,600 (58,600) 18,000 (37,800) (19,800) Kuching $ 878,600 (528,200) 350,400 (119,700) 230,700 (88,200) 142,500 $ 1,105,100 (678,100) 427,000 (178,300) 248,700 (126,000) 122,700 Less Share of corporate costs Store profit Cost of capital 5% Investment 119,000 281,000 400,000 The management accountant has prepared the above information and must explain the difference in performance across the two stores to the owner. All inventory is purchased by the head office. There is no difference in cost price of inventory between stores, but delivery costs may vary. The owner has a policy of ensuring the selling price is consistent between stores. Required: a) Calculate the return on investment (ROI) for each of the two stores. (2 marks) b) Calculate the residual income (RI) for each of the two stores. (2 marks) c) Discuss the performance of the Kuching store in comparison to the Samarahan store based on absolute profit and your calculations of ROI and RI. (3 marks) d) The management accountant is concerned that the owner will see the results and want to close the Samarahan store. Explain whether you agree with that suggestion