Optimus 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, 2020, and relevant budget data are as follows. Sales Actual $1,400,000 Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold 169,000 Controllable fixed selling and administrative expenses 81,000 (1) (2) (3) 670,000 124,000 Comparison with Budget $100,000 56,000 26,000 On target On target favorable Variable cost of goods sold is decreased by 6%. Average operating assets are decreased by 20.0%. Sales are increased by $199,000, and this increase is expected to increase contribution margin by $86,000. unfavorable Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted Compute the expected ROI in 2020 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 2 decimal places, e.g. 1.57%.) unfavorable The expected ROI % %
Optimus 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, 2020, and relevant budget data are as follows. Sales Actual $1,400,000 Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold 169,000 Controllable fixed selling and administrative expenses 81,000 (1) (2) (3) 670,000 124,000 Comparison with Budget $100,000 56,000 26,000 On target On target favorable Variable cost of goods sold is decreased by 6%. Average operating assets are decreased by 20.0%. Sales are increased by $199,000, and this increase is expected to increase contribution margin by $86,000. unfavorable Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted Compute the expected ROI in 2020 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 2 decimal places, e.g. 1.57%.) unfavorable The expected ROI % %
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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