Divisional Performance

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August 30, 2017 at 8:05 am #404248
mjibola
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Hello, please help clarify this.
1. In RI, we include fixed cost in arriving at the operating profit but we do not include depreciation (not so sure). What about ROI?
2. In transfer pricing, we ignore fixed cost unless it’s incremental and we don’t depreciate – or do we?
August 30, 2017 at 4:01 pm #404399
John Moffat
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1. We use the profit as it would appear in the SOPL, so we do include all costs and we do include depreciation.
2. Correct to both 🙂
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