Compute the base-line and the adjusted rois

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Question - Allure Decoration is an Ontario based business that designs, manufactures and sells interior decoration and accessories. The company has two divisions: Wall Decorations and Table Accessories. Each division's manager has the authority to make investments as needed and is evaluated based largely on ROI. Wall Decoration division reported the following results for 2020:

Sales $500,000

Variable costs 325,000

Controllable fixed costs 160,000

Average operating assets 80,000

Required -

 (a) Assume that the manager of Wall Decoration division is able to increase sales by $80,000. Further assume that this is possible without any increase in operating assets or controllable fixed costs. Compute the base-line and the adjusted ROIs. What should the manager do?

(b) Consider the balanced scorecard. Explain what the purpose of the financial perspective is. Provide an example.

(c) Explain what profit center is.

Reference no: EM133133855

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