QUESTION 2 Cutie Cakes Sdn Bhd is an established company supplying cupcakes to hotels, restaurants, weddings and corporate events. The company has two investment divisions. The managers for each investment division are evaluated based on their Return on Investment (ROI). The total sales of the company as at 31 December 2018 was RM250,000 and 60% of it belongs to the Icing Division. The company's policy requires a 10% minimum rate of return for a bonus to be awarded to the divisional manager. Below is the information available for the year ended 31 December 2018: Icing Division RM Costs of goods sold Selling and administrative expenses Plant and food processing machinery invested 110,000 35,000 80,000 Accessory Division RM 66,000 25,000 50,000 Currently, the Accessory Division is considering acquiring a new food processing machinery on 1 June 2019 at a cost of RM20,000 with a useful life of 5 years. This machinery would require a yearly maintenance amounted to RM1,200 but will lead to RM900 cost savings per annum. Bonus will only be rewarded if the ROI increases from divisional previous performance. Required: a. Based on Return On Investment (ROI), compare performance of the two divisions as at 31 December 2018. (Show each division's sales margin and investment turnover). (5 marks) b. b. i. If Residual Income (RI) is used as divisional performance evaluation, evaluate whether the same result in (a) above will be achieved. (4 marks) ii. Using ROI, comment on the Accessory Division's consideration of acquiring the new machinery