3. Reduce average operating assets by 4 %. Instructions
1. Compute the return on investment( ROI) for the current year.
2. Using the ROI formula, compute the ROI under each of the proposed courses of action.( Round to one decimal.)
Prepare a responsibility report for an investment center.
P10-5A
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, 2017, and relevant budget data are as follows.
Actual
Comparison with Budget
Sales
$ 1,400,0 $ 100, 000 favorable
00
45,000
Variable cost of goods sold 665,000 unfavorable
Variable selling and administrative expenses
Controllable fixed cost of goods sold
Controllable fixed selling and administrative expenses
25,000
125,000 unfavorable
170,000 On target
80,000 On target