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The service division of Raney Industries reported the following results for 2017. Sales $518,000 Variable costs 310,800 Controllable fixed costs 82,400 Average operating assets 624,000
The service division of Raney Industries reported the following results for 2017.
Sales | $518,000 | |
Variable costs | 310,800 | |
Controllable fixed costs | 82,400 | |
Average operating assets | 624,000 |
Management is considering the following independent courses of action in 2018 in order to maximize the return on investment for this division.
1. | Reduce average operating assets by $124,800, with no change in controllable margin. | |
2. | Increase sales $106,080, with no change in the contribution margin percentage. |
Compute the controllable margin and the return on investment for 2017. (Round ROI to 1 decimal place, e.g. 1.5.) Controllable margin Return on investment for 2017 % LINK TO TEXT Compute the controllable margin and the expected return on investment for each proposed alternative. (Round ROI to 1 decimal place, e.g. 1.5.) Alternative 1 Alternative 2 The controllable margin $ $ The expected return on investment % %
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