Economics · Management Accounting
A retailer has two divisions, North and South. Both sell similar products and all prices are set centrally. Shop rental costs in the South division are significantly lower than in the North division due to a specific government subsidy given to landlords in the South. Which of the following performance measures would NOT provide a fair comparison of the operational performance of the management of the two divisions?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Asset turnover
- 2Turnover per square metre of shop floor space
- 3Return on capital employed (ROCE)✓
- 4Gross profit
Correct answer
Return on capital employed (ROCE)
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