Chudzik Manufacturing Company manufactures a variety of garden and lawn equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Lawnmower Division for the year ended December 31, 2005, and relevant budget data are as follows. Prepare responsibility report for an investment center, and compute ROI. (SO 7) Actual Comparison with Budget Sales $3,000,000 $150,000 unfavorable Variable cost of goods sold 1.400,000 100.000 unfavorable Variable selling and administrative expenses 300,000 50,000 favorable Controllable fixed cost of goods sold 270,000 On target Controllable fixed selling and administrative expenses 130.000 On target Average operating assets for the year for the Lawnmower Division, were $5,000,000 which also the budgeted amount. a) Controllable margin Budget $1, 100 Actual $900 Instructions (a) Prepare a responsibility report (in thousands of dollars) for the Lawnmower Division. (b) Evaluate the manager's performance. Which items will likely be investigated by top management? (c) Compute the expected ROI in 2006 for the Lawnmower Division, assuming the following independent changes. Variable cost of goods sold is decreased by 15%. Average operating assets are decreased by 20%. Sales are increased by $500,000 and this increase is expected to increase contribution margin by $200,000