1 know headquarters wants us to add that new product line, said Dell Havasi, manager of Bilings Company's Office Products Division. "But I want to see the numbers before I make any move. Our division's return on investment RO) has led the company for three years, and I don't want any letdown Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year end bonuses given to the divisional managers who have the highest ROls. Operating results for the company's given below Sales $10,000,000 Variable expenses 6,000,000 Contribution margin 4,000,000 Fixed expenses Net operating income Divisional operating assets 3,200,000 S 800,000 4,000,000 The company had an overall return on investment Ron of 15% last year (considering all divisions. The Office Products Division has an opportunity to add a new product line that would require an additional investment in operating assets of $1,000,000. The cost and revenue characteristics of the new product line per year would be Sales Varlable expenses Fixed expenses $2,000,000 60% of sales $640,000 O Type here to search