Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Billings Company is a decentralized organization with five autonomous divisions. The divisions are evaluated on the basis of the return that they are able to
Billings Company is a decentralized organization with five autonomous divisions. The divisions are evaluated on the basis of the return that they are able to generate on invested assets, with year end bonuses given to the divisional managers who have the highest ROI figures Operating results for the company's office products division for the most recent year are as follows Sales LES Variable expenses Contribution argin S Fixed penses Net operating income Divisional perating assets 1.12,500,000 12,875,000 14,635,000 11,200,000 $ 2,925,000 $1,000,000 The company had an overall ROI of 170% 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 $3,250.000 The cost and revenue characteristics of the new product line per year would be as follows Variable expenses vedes 1,500,000 55 of sales $ 2,140,000 Required: 1. Compute the office products divisions ROI for the most recent year, also compute the Rolf the new product line were added (Do not round intermediate calculations. Round "Percentage answers to 2 decimal places, le 01234 should be considered as 123453 Answer is complete but not entirely correct. Present New Line Total 22.000 18.00 2161 ROL
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started