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Question 2 20% Return on investment = Net operating income/Average investment in operating assets = 20000/100000 = 20% Question 3 depreciation Sunk cost is that cost which has been incurred in past or incurring of which has been predetermine Depreciation is a fixed cost, incurring of which has been predetermined. Page 2 Question 1: Segmented income statement: Apparel Accessories Sales revenue 800,000 820,000 Less: Variable expense 406,000 312,000 Contribution margin 394,000 508,000 Less: Tracable fixed expense 98,000 107,000 Common fixed expense 150,000 175,000 Net Income 146,000 226,000 Question 2 i.Divison's margin = Net operating income/Sales = 2800000/3 = 7% ii. Divison's turnover = $ 38,000,000 iii.Divison's ROI = Net operating income/Average operating assets = 2800000/15000000 = 19% iv.residual income = A-(B XC) A = Net operati = 2800000-(15000000*20%) B = Average op = -200000 C = Minimum r Question 3. i. Schedule of net operating income:
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