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Need help on page 105 no 399 bpp revision kit

PFPeer Far6y ago
for part (a), (1), in the answers I am confused about the working s about why the depreciation was added to the net profit and also the head office cost.
John MoffatJohn MoffatTutor6y ago#1
The question specifically says that the ROI is to be calculated using the controllable profit (as is usually the case for the ROI). The depreciation and the head office costs are controlled by the head office and not by the division.
PFPeer Far6y ago#2
I know it's controllable profit but the part I am not understanding is the head office cost.
John MoffatJohn MoffatTutor6y ago#3
The division has no control over head office costs. The head office controls the costs in the head office and can charge the division however much it wants to.
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