Compute the expected ROI in 2022 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 2 decimal places, e.g. 1.57%.)
The expected ROI
(1) Variable selling and administrative expenses are decreased by 5%.
%
(2) Average operating assets are decreased by 20.0%.
%
(3) Sales are increased by $200,000, and this increase is expected to increase
%
contribution margin by $84,000.
Bridgeport Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2022, and relevant budget data are as follows.
Actual
Comparison with Budget
Sales
$1,400,000
$100,000 favorable
Variable cost of goods sold
680,000
55,000 unfavorable 25,000 unfavorable
Variable selling and administrative expenses
126,000 170,000
Controllable fixed cost of goods sold
On target
Controllable fixed selling and administrative expenses
80,000
On target
Average operating assets for the year for the Home Division were $2,000,000, which was also the budgeted amount
uor ]
.
OCONIS
000
-
A
.
.
120000
6000
3600 17.35] %
9000
RO
17.26
Compute the expected ROI in 2022 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 2 decimal places, e.g. 1.57%.)
The expected ROI
(1)
Variable selling and administrative expenses are decreased by 5%.
%
(2)
Average operating assets are decreased by 20.0%.
%
(3)
Sales are increased by $200,000, and this increase is expected to increase contribution margin by $84,000.
%
