Sheridan Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customers lots. Sheridan expanded into the precut housing market when it acquired Jensen Company, one of its suppliers. In this market, various types of lumber are precut into the appropriate lengths, banded into packages, and shipped to customers lots for assembly. Sheridan designated the Jensen Division as an investment center.

Sheridan Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customers' lots. Sheridan expanded into the precut housing market when it acquired Jensen Company, one of its suppliers. In this market, various types of lumber are precut into the appropriate lengths, banded into packages, and shipped to customers' lots for assembly. Sheridan designated the Jensen Division as an investment center. Sheridan uses return on investment (ROI) as a performance measure with investment defined as average operating assets. Management bonuses are based in part on ROI. All investments are expected to earn a minimum rate of return of 17.1%. Jensen's ROI has ranged from 19.9% to 23.7% since it was acquired. Jensen had an investment opportunity in 2020 that had an estimated ROI of 18.8%. Jensen management decided against the investment because it believed the investment would decrease the division's overall ROI. Selected financial information for Jensen are presented below. The division's average operating assets were $12,685,000 for the year 2020. SHERIDAN INDUSTRIES Jensen Division Selected Financial Information For the Year Ended December 31, 2020 Sales $25,773,000 Contribution margin 9,195,000 Controllable margin 2,511,630 Calculate the following performance measures for 2020 for the Jensen Division. (Round Rol to 1 decimal place, e.g. 1.5.) (1) Return on investment (ROI) (2) Residual income