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The Appliance Division of Kenmore Corporation reported the following results for 2018: Sales Revenue Variable costs Controllable fixed costs Average operating assets $10,000,000 3,000,000 1,500,000
The Appliance Division of Kenmore Corporation reported the following results for 2018: Sales Revenue Variable costs Controllable fixed costs Average operating assets $10,000,000 3,000,000 1,500,000 6,000,000 Management is considering the following independent alternative courses of action in 2019 in order to maximize the return on investment for the division. 1. Reduce controllable fixed costs by 9% with no change in sales 2. Reduce average operating assets by 12% with no change in 3. Increase sales 15% with no change in the contribution margin or variable costs controllable margin. percentage. INSTRUCTIONS (a) Compute the return on investment for 2018. (b) Compute the expected return on investment for each of the alternative courses of action
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