1.

2.

For the year ending December 31, 2020, Cobb Company accumulates the following data for the Plastics Division which it operates as an investment center contribution margin-$582,000 budget, $589,900 actual; controllable fixed costs-$297,000 budget, $303,000 actual. Average operating assets for the year were $1,900,000. Prepare a responsibility report for the Plastics Division beginning with contribution margin for the year ending December 31, 2020. (Round ROI to 1 decimal place, e.g. 1.5%.) COBB COMPANY Plastics Division Responsibility Report For the Year Ended December 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Contribution Margin Fixed Costs Net Income/(Loss) Controllable Fixed Costs Variable Costs Gross Profit Controllable Margin Return on Investment Attempts: 0 of 3 used Submit Answer The South Division of Wiig Company reported the following data for the current year. Sales $2,900,000 Variable costs 1,943,000 Controllable fixed costs 600,000 Average operating assets 5,000,000 Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the South Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. 4 Increase sales by $300,000 with no change in the contribution margin percentage. 2. Reduce variable costs by $160,000. 3. Reduce average operating assets by 3%. (a) Compute the return on investment (ROI) for the current year. (Round ROI to 2 decimal places, e.g. 1.57%.) Return on Investment (b) Using the ROI formula, compute the ROI under each of the proposed courses of action. (Round ROI to 2 decimal places, eg. 1.57%.) Return on investment Action 1 Action 2 Action 3