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?I know headquarters wants us to add that new product line,? said Dell Havasi, manager of Billings Company?s Office Products Division. ?But I want to

?I know headquarters wants us to add that new product line,? said Dell Havasi, manager of Billings Company?s Office Products Division. ?But I want to see the numbers before I make any move. Our division?s return on investment (ROI) has led the company for three years, and I don?t want any letdown.?

Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who have the highest ROIs. Operating results for the company?s Office Products Division for the most recent year are given below:

Sales$21,810,000
Variable expenses13,741,200
Contribution margin8,068,800
Fixed expenses6,040,000
Net operating income$2,028,800
Divisional operating assets$4,363,000

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