sub - managerial accounting

alx Question 2 (20 marks) Big and Happy Lad is a large business organized and managed with a divisional structure. Two typical divisions are Asia-Pacific and Europe. They are engaged in broadly similar activities and, therefore, central management compares their results in order to make judgments on managerial performance. Both divisions are regarded as investment centers. The following is summary of last year's financial results of the two divisions: Asia-Pacific Europs $'000 $:000 Capital Investment $'000 2.500 Sales 1,000 Cost of goods sold: Direct material and labour Indirect manufacturing overhead Gross profit Selling and distribution expenses Profit controllable by divisional manager Allocation of central overhead (uncontrollable) Divisional profit 80 At the beginning of last year, the Asia-Pacific division incurred substantial expenditure on automated production lines and new equipment. The Europe division has quite old plant Approximately 50% of the coloc of Furono are internal transfore to other divisions within th MacBook Pro $'000 300 220 ****** 520 480 180 300 250 212 48 500 400 260 140 40 100 20 At the beginning of last year, the Asia-Pacific division incurred substantial expenditure automated production lines and new equipment. The Europe division has quite old pla Approximately 50% of the sales of Europe are internal transfers to other divisions within t business. These transfers are based on unadjusted prevailing market price. The inter-division transfers of Asia-Pacific are minimal. The management focuses on return on investment a major performance indicator with a minimum rate of return of 10% per annum. Required (a) For the two divisions, calculate the following (based on controllable profi Return on investment (RO) (4 marks) (0) Residual income (R) (4 marks) (b) Comment on the performance of the two divisions, discussing any matters concerned when comparing divisional performance. (6 marks) (c) Identify the FOUR perspectives of performance measurement in a Balanced Scorecard management system, Give two examples of performance indicators in each perspective of measurement. Use the following format in your answer: Perspectives Performance indicators (6 marks) HE B I A X. X 66 X alx Question 2 (20 marks) Big and Happy Lad is a large business organized and managed with a divisional structure. Two typical divisions are Asia-Pacific and Europe. They are engaged in broadly similar activities and, therefore, central management compares their results in order to make judgments on managerial performance. Both divisions are regarded as investment centers. The following is summary of last year's financial results of the two divisions: Asia-Pacific Europs $'000 $:000 Capital Investment $'000 2.500 Sales 1,000 Cost of goods sold: Direct material and labour Indirect manufacturing overhead Gross profit Selling and distribution expenses Profit controllable by divisional manager Allocation of central overhead (uncontrollable) Divisional profit 80 At the beginning of last year, the Asia-Pacific division incurred substantial expenditure on automated production lines and new equipment. The Europe division has quite old plant Approximately 50% of the coloc of Furono are internal transfore to other divisions within th MacBook Pro $'000 300 220 ****** 520 480 180 300 250 212 48 500 400 260 140 40 100 20 At the beginning of last year, the Asia-Pacific division incurred substantial expenditure automated production lines and new equipment. The Europe division has quite old pla Approximately 50% of the sales of Europe are internal transfers to other divisions within t business. These transfers are based on unadjusted prevailing market price. The inter-division transfers of Asia-Pacific are minimal. The management focuses on return on investment a major performance indicator with a minimum rate of return of 10% per annum. Required (a) For the two divisions, calculate the following (based on controllable profi Return on investment (RO) (4 marks) (0) Residual income (R) (4 marks) (b) Comment on the performance of the two divisions, discussing any matters concerned when comparing divisional performance. (6 marks) (c) Identify the FOUR perspectives of performance measurement in a Balanced Scorecard management system, Give two examples of performance indicators in each perspective of measurement. Use the following format in your answer: Perspectives Performance indicators (6 marks) HE B I A X. X 66 X