Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ayayai Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data

   

Ayayai 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, 2022, and relevant budget data are as follows. Sales Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative expenses Actual $1,399,000 670,000 124,000 169,000 79,000 Comparison with Budget $100,000 favorable 54,000 unfavorable 24,000 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. Compute the expected ROI in 2022 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 2 decimal places, e.g. 1.57%.) (1) (2) (3) Variable selling and administrative expenses are decreased by 6%. Average operating assets are decreased by 12.5%. Sales are increased by $199,000, and this increase is expected to increase contribution margin by $84,000. The expected ROI % % %

Step by Step Solution

3.45 Rating (142 Votes )

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_2

Step: 3

blur-text-image_3

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

Accounting Tools for business decision making

Authors: kimmel, weygandt, kieso

4th Edition

978-0470117262, 9780470534786, 470117265, 470534788, 978-0470095461

More Books

Students also viewed these Accounting questions