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Heritage Hockey Sticks is a Canadian company that aims to grow the game of hockey through the effort of making and supplying hockey sticks at

Heritage Hockey Sticks is a Canadian company that aims to grow the game of hockey through the effort of making and supplying hockey sticks at price points that are more affordable. The company has two main divisions: Wholesale (sold via retailers) and Teams (sold to teams and organizations directly). Each division's manager has the authority to make investments as needed and is evaluated based largely on ROI. The Wholesale division reported the following results for the fiscal 2020:

Sales

$425,000

Variable costs

306,000

Controllable fixed costs

103,000

Average operating assets

175,000

Instructions

(a) Assume that the manager of the Wholesale division is able to reduce the operating assets by $20,000 without any change in sales or operating income. Compute the base-line and the adjusted ROIs. What should the manager do?

(b) Consider the balanced scorecard. Explain what the purpose of the learning and growth perspective is. Provide an example.

(c) Explain what investment center is.

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