"I know headquarters wants us to add that new product line," said Dell, 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 divisions. The divisions are evaluated on the basis of return on investment (ROI), 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 as follows: - Sales =$22,300,000 - Variable Expenses =$13,999,600 - Contribution Margin = ? - Fixed Expenses =$6,115,000 - Net Operating Income = ? - Average Operating Assets =$5,575,000 The company had an overall return on investment (ROI) of 17.00% last year. Question Part 2: The Office Products Division has an opportunity to add a new product line that would require an additional investment in operating assets of $3,857,400. The cost and revenue characteristics of the new product line per year would be: - Sales =$9,650,000 - Variable expenses =$65% of sales - Fixed Expenses =$2,583,600 Required: Round your ROI answer to nearest whole number and enter it as a percent, not a decimal. 1. Solve for the contribution margin. 2. Solve for the net income. 3. Compute the Office Products Division's ROI for the recent year (without the new line added). 4. Compute the Office Products Division's ROI for the new product line ONLY. 5. Compute the TOTAL office Products Division's ROI with the new product line added. 6. Suppose the company's minimum required rate of return on operating assets is 14% and that performance is evaluated using residual income (RI). 1. compute the RI for the recent year 2. compute the RI for the new product line ONLY 3. compute the TOTAL RI with the product line added 1. contribution margin 2. net income