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Assume the division is an investment center, and average operating assets were $1,000,000. The noncontrollable fixed costs are controllable at the investment center level. Compute ROI. (Round answer to 2 decimal places, e.g. 15.25%.) Return on investment Indicate the impact of the change on ROI. (Round answer to 2 decimal places, e.g. 15.25%) Return on investmen improved deteriorated Return on investment by Assume the division is an investment center, and average operating assets were $1,000,000. The noncontrollable fixed costs are controllable at the investment center level. Compute ROI. (Round answer to 2 decimal places, e.g. 15.25%.)

Assume the division is an investment center, and average operating assets were $1,000,000. The noncontrollable fixed costs are controllable at the investment center level. Compute ROI. (Round answer to 2 decimal places, e.g. 15.25%.) Return on investment Indicate the impact of the change on ROI. (Round answer to 2 decimal places, e.g. 15.25%) Return on investmen improved deteriorated Return on investment by Assume the division is an investment center, and average operating assets were $1,000,000. The noncontrollable fixed costs are controllable at the investment center level. Compute ROI. (Round answer to 2 decimal places, e.g. 15.25%.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Assume the division is an investment center, and average operating assets were $1,000,000. The noncontrollable fixed costs are controllable at the investment center level. Compute ROI. (Round answer to 2 decimal places, e.g. 15.25%.) Return on investment Indicate the impact of the change on ROI. (Round answer to 2 decimal places, e.g. 15.25%) Return on investmen improved deteriorated Return on investment by Assume the division is an investment center, and average operating assets were $1,000,000. The noncontrollable fixed costs are controllable at the investment center level. Compute ROI. (Round answer to 2 decimal places, e.g. 15.25%.)
Transcribed Image Text:Assume the division is an investment center, and average operating assets were $1,000,000. The noncontrollable fixed costs are controllable at the investment center level. Compute ROI. (Round answer to 2 decimal places, e.g. 15.25%.) Return on investment Indicate the impact of the change on ROI. (Round answer to 2 decimal places, e.g. 15.25%) Return on investmen improved deteriorated Return on investment by Assume the division is an investment center, and average operating assets were $1,000,000. The noncontrollable fixed costs are controllable at the investment center level. Compute ROI. (Round answer to 2 decimal places, e.g. 15.25%.)
The Camping Division of GH Company is operated as a profit center. Sales for the division were budgeted for 2020 at $698,000. The only variable costs budgeted for the division were cost of goods sold ($334,000) and selling and administrative ($48,000). Fixed costs were budgeted at $76,000 for cost of goods sold, $68,000 for selling and administrative, and $70,000 for noncontrollable fixed costs. Actual results for these items were: Sales Cost of goods sold Variable Fixed Selling and administrative Variable Fixed Noncontrollable fixed $675,000. 309,000 80,000 49,000 50,000 70,000 Upon further analysis, GH Company determined that if it committed to a 12 month advertising campaign costing $16,000, it could increase budgeted sales by 25%. Variable costs also will increase by 25%. Fixed cost of goods sold would remain at $76,000 and selling and administrative expenses increases by the $16,000 cost of this contract to a total of $84,000. Noncontrollable fixed costs would remain at $70,000. This plan resulted in the following actual results: Sales Cost of goods sold Variable Fixed Selling and administrative Variable Fixed Noncontrollable fixed $870,500 412,500 80,000 58,000 66,000 70,000
Transcribed Image Text:The Camping Division of GH Company is operated as a profit center. Sales for the division were budgeted for 2020 at $698,000. The only variable costs budgeted for the division were cost of goods sold ($334,000) and selling and administrative ($48,000). Fixed costs were budgeted at $76,000 for cost of goods sold, $68,000 for selling and administrative, and $70,000 for noncontrollable fixed costs. Actual results for these items were: Sales Cost of goods sold Variable Fixed Selling and administrative Variable Fixed Noncontrollable fixed $675,000. 309,000 80,000 49,000 50,000 70,000 Upon further analysis, GH Company determined that if it committed to a 12 month advertising campaign costing $16,000, it could increase budgeted sales by 25%. Variable costs also will increase by 25%. Fixed cost of goods sold would remain at $76,000 and selling and administrative expenses increases by the $16,000 cost of this contract to a total of $84,000. Noncontrollable fixed costs would remain at $70,000. This plan resulted in the following actual results: Sales Cost of goods sold Variable Fixed Selling and administrative Variable Fixed Noncontrollable fixed $870,500 412,500 80,000 58,000 66,000 70,000
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