ACC 560 MART Extraordinary Success/acc560mart.com ACC 560 MART Extraordinary Success/acc560mart.com | Page 50

Controllable fixed cost of goods sold
170,000
On target
Controllable fixed selling and administrative expenses
80,000
On target
Average operating assets for the year for the Home Division were
$2,000,000 which was also the budgeted amount.
Instructions
1.
Prepare a responsibility report (in thousands of dollars)
for the Home Division.
2.
Evaluate the manager's performance. Which items will
likely be investigated by top management?
3.
Compute the expected ROI in 2017 for the Home Division,
assuming the following independent changes to actual data.
1. Variable cost of goods sold is decreased by 5%.
2. Average operating assets are decreased by 10%.
3. Sales are increased by $200,000, and this increase is expected to
increase contribution margin by $80,000.
Prepare reports for cost centers under responsibility accounting, and
comment on performance of managers.
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