Bobbie Howell, the managing partner of the law firm Howell, Bagan, and Clark, LLP, makes asset acquisition and disposal decisions for the firm. As managing partner, she supervises the partners in charge of the firm's three branch offices. Those partners have the authority to make employee compensation decisions. The partners' compensation depends on the profitability of their branch office. Victoria Smith manages the City Branch, which has the following master budged and actual results for the year:

Required
1. Assume that the City Branch is a profit center. Prepare a performance report that includes a flexible budget. Determine the variances between actual results, the flexible budget. Determine the variances between actual results, the flexible budget, and the master budget.
2. Evaluate Victoria Smith's performance as manager of the City Branch.
3. Assume that the branch managers are assigned responsibility for capital expenditures and that the branches are thus investment centers. City Branch is expected to generate a desired ROI of at least 30 percent on average invested assets of $40,000.
a. Compute the branch's return on investment and residual income.
b. Using the ROI and residual income, evaluate Victoria Smith's performance as branch manager.

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Master West East Coast Budget Coast Center costs Rolled aluminum (S0.01) Lids ($0.005) Direce labor (S0.0025) Small tools and su Depreciation and rent Total cost Performance measures Cans processed per hour Average daily pounds of scrap metal Cans processed in millions) $4,000,000 S3,492,000 $5,040,000 2,000,000 1,980,000 2,016,000 1,000,000 864,000 1,260,000 432,000 588,000 480,000 480,000 $8,000,000 S7,248,000 S9,384,000 pplies (0.0013)520,000 432 480,000 45,662 41,096 6 360 47,945 7 420 400