The Flug Company produces and sells aircraft parts across three different regions. Each region is considered a separate division as follows: Division A, Division B and Division C. The following information is relevant to each division: Division A Sales Cost of sales Head office costs (allocated) Divisional assets Corporate assets 40 000 22 000 5 000 100 000 20 000 Division B 30 000 16 500 5 000 180 000 20 000 The following additional information is available: The Flug Company plans to evaluate divisional performance. The Flug Company uses direct costing as the costing method. The Flug Company's opportunity cost of capital is 8%. Sales are earned by each division. The corporate assets are assets controlled by head office. Division C 35 000 15 000 5 000 140 000 20 000 Required 1. EXPLAIN the difference between a functional and divisionalised organisational structure. Your answer should include examples. 2. CALCULATE each of the following for Division A, Division B and Division C: (a) Profit, (b) Return on investment and (c) Residual income. Your answer should justify the figures that you use as part of your calculations. 3. EVALUATE the performance of all three divisions using the information you calculated in part 2. Your answer should clearly explain which division you consider to be performing best, and justify your answer. 4. EXPLAIN which performance measure you would recommend the Flug Company to use to evaluate divisional performance.