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Sarasota Company manu 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, 2022, and relevant budget data are as follows. Sales Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative expenses Actual $1,400,000 680,000 124,000 170,000 78,000 Comparison with Budget $101,000 favorable 55,000 unfavorable 25,000 unfavorable On target On target Average operating assets for the year for the Home Division were $2,000,000, which was also the budgeted amount.

Sarasota Company manu 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, 2022, and relevant budget data are as follows. Sales Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative expenses Actual $1,400,000 680,000 124,000 170,000 78,000 Comparison with Budget $101,000 favorable 55,000 unfavorable 25,000 unfavorable On target On target Average operating assets for the year for the Home Division were $2,000,000, which was also the budgeted amount.

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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Sarasota 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, 2022, and relevant budget data are as follows. Sales Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative expenses Actual $1,400,000 680,000 124,000 170,000 78,000 Comparison with Budget $101,000 favorable 55,000 unfavorable 25,000 unfavorable On target On target Average operating assets for the year for the Home Division were $2,000,000, which was also the budgeted amount.
Transcribed Image Text:Sarasota 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, 2022, and relevant budget data are as follows. Sales Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative expenses Actual $1,400,000 680,000 124,000 170,000 78,000 Comparison with Budget $101,000 favorable 55,000 unfavorable 25,000 unfavorable On target On target Average operating assets for the year for the Home Division were $2,000,000, which was also the budgeted amount.
Compute the expected ROI in 2022 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 2 decimal places, e.g. 1.57%.) Your answer is partially correct. (1) Variable selling and administrative expenses are decreased by 7%. Average operating assets are decreased by 20.0%. (2) (3) Sales are increased by $200,000, and this increase is expected to increase contribution margin by $86,000. The expected ROI 21.75 21.70 % % %
Transcribed Image Text:Compute the expected ROI in 2022 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 2 decimal places, e.g. 1.57%.) Your answer is partially correct. (1) Variable selling and administrative expenses are decreased by 7%. Average operating assets are decreased by 20.0%. (2) (3) Sales are increased by $200,000, and this increase is expected to increase contribution margin by $86,000. The expected ROI 21.75 21.70 % % %
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