22-5A Part C Thank you!

Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2017, and relevant budget dat follows. Actual Sales Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative expenses $1,401,000 676,000 126,000 170,000 79,000 Comparison with Budget $100,000 favorable 55,000 unfavorable 25,000 unfavorable On target On target Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted amount. (a) Your answer is partially correct. Try again. Prepare a responsibility report for the Home Division. (List variable costs before fixed costs. Round ROI to 1 decimal place, e.g. 1.5.) OPTIMUS COMPANY Home Division Responsibility Report For the Year Ended December 31, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Sales 1301000 1401000 100000 Favorable Variable Costs Cost of Goods Sold 621000 676000 55000 Unfavorable Selling and Administrative 101000 126000 25000 Unfavorable T Total Variable Costs 722000 802000 80000 Unfavorable x M Controllable Margin 579000 599000 20000 Favorable x Total Controllable Direct Fixed Costs Cost of Goods Sold 170000 170000 0 Neither Favorable nor Unfavorable Selling and Administrative 79000 79000 0 Neither Favorable nor Unfavorable X Total Controllable Direct Fixed Costs 252000 252000 Neither Favorable nor Unfavorable Contribution Margin 327000 347000 20000 $1 Favorable ROI 16.35 % 17.35 1 % Favorable Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION SHOW ANSWER LINK TO TEXT (c) Compute the expected ROI in 2017 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 1 decimal place, e.g. 1.5.) The expected ROI (1) Variable cost of goods sold is decreased by 6%. % (2) Average operating assets are decreased by 12%. % (3) Sales are increased by $199,000, and this increase is expected to increase contribution margin by $84,000. % Click if you would like to Show Work for this question: Open Show Work