What is the division return on investment

Assignment Help Managerial Accounting

Reference no: EM133204838

Managerial Accounting Assignment -

Question 1 - Define in Your words

a. Cost Centre

b. Profit Centre

c. Investment Centre

Question 2 - Karim Corporation is considering two alternatives that are code-named A and B. Costs associated with the alternatives are listed below:

	Alternative A	Alternative B
Supplies costs	SAR 33 000	SAR 33 000
Assembly costs	SAR 48 000	SAR 51 000
Power costs	SAR 32 000	SAR 22 000
Inspection costs	SAR 11 000	SAR 27 000

Required -

a. Which costs are relevant and which are not relevant in the choice between these two alternatives?

b. What is the differential cost between the two alternatives?

Question 3 - Karim Industries is a division of a major corporation. Last year the division had total sales of SAR 43,380,000, net operating income of SAR 4,828,980, and average operating assets of SAR 9,000,000. The company's minimum required rate of return is 12%.

Required -

a. What is the division's margin?

b. What is the division's turnover?

c. What is the division's return on investment (ROI)?

Question 4 - Karim Corporation is considering investing in a new piece of equipment for SAR 100,000 that will provide annual cash flows of SAR 20,000 per year for seven years. Calculate the cash payback period.

Reference no: EM133204838

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