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costs able fixed costs operating assets $420,000 252,000 73,500 525,000 ment is considering the following independent courses of action in 2023 in order to maximize the return on investr

costs able fixed costs operating assets $420,000 252,000 73,500 525,000 ment is considering the following independent courses of action in 2023 in order to maximize the return on investr

FINANCIAL ACCOUNTING
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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The service division of Bramble Industries reported the following results for 2022. Sales Variable costs Controllable fixed costs Average operating assets Management is considering the following independent courses of action in 2023 in order to maximize the return on investment for this division. $420,000 252,000 73,500 525,000 1. Reduce average operating assets by $105,000, with no change in controllable margin. 2. Increase sales $84,000, with no change in the contribution margin percentage. Compute the controllable margin and the return on investment for 2022. Controllable margin Return on investment for 2022 The controllable margin Compute the controllable margin and the expected return on investment for 2023 for each proposed alternative. (Round decimal place, e.g. 1.5%.) The expected return on investment Alternative 1 % % Alternative 2 %
Transcribed Image Text:The service division of Bramble Industries reported the following results for 2022. Sales Variable costs Controllable fixed costs Average operating assets Management is considering the following independent courses of action in 2023 in order to maximize the return on investment for this division. $420,000 252,000 73,500 525,000 1. Reduce average operating assets by $105,000, with no change in controllable margin. 2. Increase sales $84,000, with no change in the contribution margin percentage. Compute the controllable margin and the return on investment for 2022. Controllable margin Return on investment for 2022 The controllable margin Compute the controllable margin and the expected return on investment for 2023 for each proposed alternative. (Round decimal place, e.g. 1.5%.) The expected return on investment Alternative 1 % % Alternative 2 %
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