Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3. The service division of Smithberg Industries reported the following results for 2014. Sales $800,000 Variable costs 500,000 Controllable Fixed Costs 125,000 Average operating assets

3. The service division of Smithberg Industries reported the following results for 2014. Sales $800,000 Variable costs 500,000 Controllable Fixed Costs 125,000 Average operating assets 825,000

Compute the controllable margin and the return on investment for 2014.

4. Management is considering the following independent courses of action in 2015 in order to maximize the return on investment for this division. (Based on original financial information above). Compute the controllable margin and the expected ROI for each proposed alternative.

a) Reduce average operating assets by $125,000 with no change in controllable margin.

b) Increase sales $100,000 with no change in contribution margin percentage.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting A Managerial Emphasis

Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav

13th Edition

8120335643, 136126634, 978-0136126638

More Books

Students also viewed these Accounting questions

Question

2. Ask several students to explain the directions.

Answered: 1 week ago

Question

Explain the various methods of job evaluation

Answered: 1 week ago

Question

Differentiate Personnel Management and Human Resource Management

Answered: 1 week ago

Question

Describe the functions of Human resource management

Answered: 1 week ago

Question

Distinguish between hearing and listening.

Answered: 1 week ago

Question

Use your voice effectively.

Answered: 1 week ago