DATA FOR TOWER HILL DIVISION Revenue Fixed Asset: 10,000 Purchases by division 500 Purchases by Head Office 2,500 Direct Material and Labour Costs (variable) 6,000 Indirect Labour (Consolidate fixed overhead) 1000 Divisional Manager's Salary 400 Apportioned Head Office Costs Depreciation on fixed assets Company's cost of capital 600 20% 10% Assuming that fixed assets comprise the total investment in Tower Hill Division. You are required to determine the following: (iv). Controllable residual profit (v). Net residual profit
DATA FOR TOWER HILL DIVISION
Revenue 10, 000
Fixed Asset:
Purchases by division 500
Purchases by Head Office 2,500
Direct Material and Labour Costs (variable) 6,000
Indirect Labour (Consolidate fixed
Divisional Manager’s Salary 400
Apportioned Head Office Costs 600
Company’s cost of capital 10%
Assuming that fixed assets comprise the total investment in Tower Hill Division. You are required to determine the following:
(iv). Controllable residual profit
(v). Net residual profit
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