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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 % %

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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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 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) $1,400,000 Variable cost of goods sold is decreased by 6%. Average operating assets are decreased by 20.0%. 670,000 124,000 Comparison with Budget $100,000 56,000 26,000 On target On target favorable Average operating assets for the year for the Home Division were $2,000,000 which was also the budgetedCompute 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%.) Sales are increased by $199,000, and this increase is expected to increase contribution margin by $86,000. unfavorable unfavorable The expected ROI % %
Transcribed Image Text: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 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) $1,400,000 Variable cost of goods sold is decreased by 6%. Average operating assets are decreased by 20.0%. 670,000 124,000 Comparison with Budget $100,000 56,000 26,000 On target On target favorable Average operating assets for the year for the Home Division were $2,000,000 which was also the budgetedCompute 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%.) Sales are increased by $199,000, and this increase is expected to increase contribution margin by $86,000. unfavorable unfavorable The expected ROI % %
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