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Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for

Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2020, and relevant budget data are as follows.

Actual

Comparison with Budget

Sales $1,399,000 $100,000 favorable
Variable cost of goods sold 670,000 54,000 unfavorable
Variable selling and administrative expenses 124,000 24,000 unfavorable
Controllable fixed cost of goods sold 169,000 On target
Controllable fixed selling and administrative expenses 79,000 On target

Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted amount.

Compute the expected ROI in 2020 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 2 decimal places, e.g. 1.57%.)

The expected ROI

(1) Variable cost of goods sold is decreased by 6%. %
(2) Average operating assets are decreased by 12.5%. %
(3) Sales are increased by $199,000, and this increase is expected to increase contribution margin by $84,000. %

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