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 ( \(\$ 440,000\) ) and selling and administrative ( \(\$ 60,000\) ). 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:

Instructions:

(a) Prepare a responsibility report for the Sports Equipment Division for 2010.

(b) Assume the division is an investment center, and average operating assets were \(\$ 1,000,000\). Compute ROI.

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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