Divisional performance

Please cold you help with the following:

Osborne Co is a subsidiary of Butler Co, which operates a decentralised system of management.Group companies have control over their own working capital and make proposals to the main board
for capital expenditure projects. In calculation of Profit, why non-controllable overheads are deducted from revenue. I think not only recharge of head office but also non controllable o/h should not be deducted.

Income statement
(In $000 )
Revenue 8,500
Cost of sales 5,300
Controllable overheads 1,700
Non-controllable overheads 950
Head office recharge 700

1)For this question you gave answer that if division is evaluated, only rechargeable head office cost is deductible. But in the kit they deduct non controllable overheads.Did you mean we should add rechargeable head office to profit which is equal to revenue less non controllable overheads?
Then, please tell, is it something we re supposed o know that this is different if manager is evaluated (not division)?

2)they write minimum return of 12% is expected for ROE.No expected cost of capital is given.
So,
they use this 12% in calculation of RI multiplying capital by it.Is it correct?

This is Exam kit.