The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2014 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:

Sales $880,000 Cost of goods sold Variable 408,000 Fixed 105,000 Selling and administrative Variable 61,000 Fixed 66,000 Noncontrollable fi xed 90,000 Instructions

(a) Prepare a responsibility report for the Sports Equipment Division for 2014.

(b) Assume the division is an investment center, and average operating assets were

$1,000,000. The noncontrollable fi xed costs are controllable at the investment center level. Compute ROI.

AppendixLO1