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Last month's data for a company with two divisions was as follows: Division 1 Sales Variable expenses as a percentage of sales Traceable fixed
Last month's data for a company with two divisions was as follows: Division 1 Sales Variable expenses as a percentage of sales Traceable fixed expenses Average operating assets Minimum required rate of return The company's fixed expenses total $220,000 per month. Required: $300,000 $130,000 $180,000 Division 2 $200,000 $80,00 $170,000 12% . Prepare a segmented income statement in good form. (7 marks) 2 Using margin and turnover, calculate the return on investment (ROI) for Division 2. (2 marks) . Calculate the residual income for Division 2. (3 marks) 4. List two concerns a company might have about using return on investment (ROI) as a performance measure (2 marks)
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