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Q1. Karim Corporation is considering two alternatives that are code-named A and B. Costs associated...

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Accounting

Q1. Karim Corporation is considering two alternatives that are code-named A and B. Costs associated with the alternatives are listed below:

Alternative A Alternative B
Supplies costs SAR 33 000 SAR 33 000
Assembly costs SAR 48 000 SAR 51 000
Power costs SAR 32 000 SAR 22 000
Inspection costs SAR 11 000 SAR 27 000

Required: a. Which costs are relevant and which are not relevant in the choice between these two alternatives? b. What is the differential cost between the two alternatives?

Q.2 Karim Industries is a division of a major corporation. Last year the division had total sales of SAR 43,380,000, net operating income of SAR 4,828,980, and average operating assets of SAR 9,000,000. The company's minimum required rate of return is 12%.

Required: a. What is the division's margin? b. What is the division's turnover? c. What is the division's return on investment (ROI)?

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