Jeffery Manufacturing Company manufactures a variety of garden and lawn equipment. The company operates through three divisions.
Question:
Jeffery Manufacturing Company manufactures a variety of garden and lawn equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Lawnmower Division for the year ended December 31, 2010, and relevant budget data are as follows.
Instructions:
(a) Prepare a responsibility report (in thousands of dollars) for the Lawnmower Division.
(b) Evaluate the manager's performance. Which items will likely be investigated by top management?
(c) Compute the expected ROI in 2011 for the Lawnmower Division, assuming the following independent changes.
(1) Variable cost of goods sold is decreased by \(15 \%\).
(2) Average operating assets are decreased by \(20 \%\).
(3) Sales are increased by \(\$ 500,000\) and this increase is expected to increase contribution margin by \(\$ 200,000\).
Step by Step Answer:
Accounting Tools For Business Decision Making
ISBN: 9780470377857
3rd Edition
Authors: Paul D. Kimmel