1. If Department B is able to reduce its operating assets by $100,000, Department B's new ROI would be2. If Department A is able to increase its controllable margin by $60,000 as a result of reducing variable costs, Department A's new ROI would be AB Company has two investment çenters and has developed the following information:Department BDepartment AP120,000Departmental controllable marginAverage operating assetsSales?P400,000250,00012%?800,00010%ROI

Return on Investment Return ROI measures the segments ability to utilize its operating assets to…

1. If Department B is able to reduce its operating assets by $100,000, Department B's new ROI would be 2. If Department A is able to increase its controllable margin by $60,000 as a result of reducing variable costs, Department A's new ROI would be

1. If Department B is able to reduce its operating assets by $100,000, Department B's new ROI would be 2. If Department A is able to increase its controllable margin by $60,000 as a result of reducing variable costs, Department A's new ROI would be

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

1. If Department B is able to reduce its operating assets by $100,000, Department B's new ROI would be

2. If Department A is able to increase its controllable margin by $60,000 as a result of reducing variable costs, Department A's new ROI would be

AB Company has two investment çenters and has developed the following information:
Department B
Department A
P120,000
Departmental controllable margin
Average operating assets
Sales
?
P400,000
250,000
12%
?
800,000
10%
ROI

Formula Formula ROI (%) = Net Income Principal Amount × 100

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