Calculate the variety of tools and industrial equipment


Suppan Manufacturing 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, 2012, and relevant budget data are as follows.



Actual


Comparison with Budget

Sales
$1,500,690
$100,140 favorable
Variable cost of goods sold
693,690
60,290 unfavorable
Variable selling and administrative expenses
124,550
24,250 unfavorable
Controllable fixed cost of goods sold
169,540
On target
Controllable fixed selling and administrative expenses
79,340
On target

Average operating assets for the year for the Home Division were $2,500,190 which was also the budgeted amount.

Compute the expected ROI in 2013 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 1 decimal place, e.g. 1.5.)





The expected ROI

(1)
Variable cost of goods sold is decreased by 7%.

Entry field with incorrect answer

%
(2)
Average operating assets are decreased by 11%.

Entry field with correct answer

%
(3)
Sales are increased by $200,800, and this increase is expected to increase contribution margin by $90,480.

Entry field with incorrect answer

%

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Accounting Basics: Calculate the variety of tools and industrial equipment
Reference No:- TGS0687085

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