HA2011 FULL QUES a and b ans

Question 4 (11 marks) a) What type of responsibility centre best describes each of the following, and why? ( 3 marks) a. The cleaning department of Melbourne Private Hospital Ltd. b. The reservations division of Rosie Transport Tours Ltd c. The Singapore division of a global video technology company, whose head office is in Sydney. b) Fishy and Chippy Ltd operates a chain of restaurants in Perth, South Australia. The head office reviewed information about two of its restaurants - i.e. Restaurant Alpha and Restaurant Gamma (see below). Each restaurant operates as a separate stand-alone business and is designated as an investment centre. ( 8 marks) Required: i. Calculate the financial performance of each restaurant using both ROI and RI. Assume the firm's minimum required rate of return is 13%. (4 marks) ii. Which restaurant performed better? Explain (2 marks) iii. Suggest two ways the poor-performing restaurant can improve its performance in the future ( 2 marks) SHOW YOUR WORKINGS