The Consumer Division, a profit center of McKesson Company, reported the following data for the year of 2017:

Actual Budget

Sales $7,000,000 $7,300,000

Variable costs 4,200,000 4,150,000

Controllable fixed costs 800,000 820,000

Non-controllable fixed costs 530,000 570,000

Average operating assets 2,350,000 2,400,000

Instructions

(a) Prepare a responsibility report for the manager of the Consumer Division.

(b) What is the best measure of the manager's performance? Why?

(c) How would the responsibility report differ if the division was an investment center? Use computations to illustrate your answer.