Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The South Division of Wilig Company reported the following data for the current year 52,943000 1.930.608 Sales Variable costs Controllable fixed costs 604,800 Average operating
The South Division of Wilig Company reported the following data for the current year 52,943000 1.930.608 Sales Variable costs Controllable fixed costs 604,800 Average operating assets 5.082.500 Top management is unhappywith the investment center'sreturn on investment (ROl). It asks the manager of the South Division to submit plans to improve ROl in the next year. The manager believes it is feasible to consider the following independent courses of action. 1. Increase sales by $ 321.000 with no change in the contribution margin percentage. 2. Reduce variable costs by $ 153.500 3. Reduce average operating assets by 5%. (a) Compute the return on investment (ROI) for the current year. (Round ROl to 1 decimal place, eg. 1.5.) Return on Investment 96 (b) Using the ROl formula, compute the ROl under each of the proposed courses of action. (Round ROI to 1 decimal place, eg. 15) Return on investment Action 1 Action 2 Action 3 96
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started