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 ROl, with year-end bonuses given to the divisional managers who have the highest ROls. Operating results for the company's Office Products Division for the most recent year are given below: Sales $ 21,600,000 Variable expenses 13,622,600 Contribution margin 7,977,400 Fixed expenses Net operating income Divisional operating assets 6,010,000 $ 1,967,400 $ 4,499,200 The company had an overall return on investment (ROI) of 17.00% 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 $2,326,200. The cost and revenue characteristics of the new product line per year would be Sales Variable expenses Fixed expenses $ 9,300,000 65% of sales $ 2,557,400