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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 680,000 56,000 unfavorable
Variable selling and administrative expenses 125,000 25,000 unfavorable
Controllable fixed cost of goods sold 169,000 On target
Controllable fixed selling and administrative expenses 81,000 On target
Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted amount.

Prepare a responsibility report for the Home Division. (List variable costs before fixed costs. Round ROI to 2 decimal places, e.g. 1.57%.)

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 7%.

%
(2) Average operating assets are decreased by 20.0%.

%
(3) Sales are increased by $201,000, and this increase is expected to increase contribution margin by $84,000.

%

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