Actual Comparison with Budget

Sales $1,500,000 $100,000

favorable Variable cost of goods sold 700,000 60,000 unfavorable

Variable selling and administrative expenses 125,000 25,000 unfavorable

Controllable fixed cost of goods sold 170,000 On target

Controllable fixed selling and administrative expenses 80,000 On target

Average operating assets for the year for the Home Division were $2,500,000 which was also the budgeted amount.

Compute the expected ROI in 2013 with the following independent changes to actual data.

Variable cost of goods sold is decreased by 6%.

Average operating assets are decreased by 10%.

Sales are increased by $200,000, and this increase is expected to increase contribution margin by $90,000.