The Sports Equipment Division of Brandon McCarthy Company is operated as a profit center. Sales for the division were budgeted for 2008 at $900,000.The only variable costs budgeted for the division were cost of goods sold and selling and administrative. Fixed costs were budgeted at $100,000 for cost of goods sold, $90,000 for selling and administrative and $70,000 for noncontrollable fixed costs. Actual results for these items were;
- Sales $880,000
- Cost of goods sold
- Variable 409,000
- Fixed 105,000
- Selling and administrative
- Variable 61,000
- Fixed 67,000
- Noncontrollable fixed 80,000
Prepare a responsibility report for the Sports Equipment Division for 2008.
- BRANDON McCARTHY COMPANY
- Sports Equipment Division
- Responsibility Report
- 2008
- Budget
- Actual
- Difference
- Sales $ $ $
- Variable costs
- Cost of goods sold
- Selling and administrative
Total
- Contribution margin
- Controllable fixed costs
- Cost of goods sold
- Selling and administrative
Assume the division is an investment center, and average operating assets were $1,000,000. Compute ROI.