For its three investment centers, Concord Company accumulates the following data: I Sales $2,280,000 $4,560,000 $4,560,000 Controllable margin 1,596,000 2,280,000 4,134,400 Average operating assets 5,700,000 8,350,000 11,400,000 The company expects the following changes for investment centers I, II, and III in the next year: investment center I to increase sales 15%, investment center II to decrease controllable fixed costs $392,000, and investment center III to decrease average operating assets $520,000. Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.) The expected return on investment I % % III %

For its three investment centers, Concord Company accumulates the following data: I Sales $2,280,000 $4,560,000 $4,560,000 Controllable margin 1,596,000 2,280,000 4,134,400 Average operating assets 5,700,000 8,350,000 11,400,000 The company expects the following changes for investment centers I, II, and III in the next year: investment center I to increase sales 15%, investment center II to decrease controllable fixed costs $392,000, and investment center III to decrease average operating assets $520,000. Compute the expected return on investment (ROI) for each center. Assume investment center I has a contribution margin percentage of 70%. (Round ROI to 1 decimal place, e.g. 1.5%.) The expected return on investment I % % III %

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 27E: Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the...

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Subject: acc
Subject: accounting
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Fill in the blanks in the schedule below for two separate investment centers A and B. Note: Round your final answers to 1 decimal place. Investment Center Sales Income Average assets Profit margin Investment turnover Return on investment A + $ 240,000 $ 1,200,000 8.0% B $ 10,400,000 2.0 12.0%
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