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The Sports Equipment Division of Coronado Company is operated as a profit center. Sales for the division were budgeted for 2020 at $902,000. The only
The Sports Equipment Division of Coronado Company is operated as a profit center. Sales for the division were budgeted for 2020 at $902,000. The only variable costs budgeted for the division were cost of goods sold ($443,000) and selling and administrative ($62,000). Fixed costs were budgeted at $101,000 for cost of goods sold, $93,000 for selling and administrative, and $73,000 for noncontrollable fixed costs. Actual results for these items were: Sales Cost of goods sold Variable Fixed Selling and administrative $886,000 418,000 107,000 Variable 64,000 Fixed 72,000 Noncontrollable fixed 90,000 Sales Variable Costs Cost of Goods Sold Budget CORONADO COMPANY Sports Equipment Division Responsibility Report For the Year Ended December 31, 2020 Actual 902,000 886,000 i 443,000 i 418,000 Selling and Administrative 62.000 64,000 Total Variable Costs 505,000 482.000 i Contribution Margin 397,000 404,000 Controllable Fixed Costs) 101,000 i 107,000 Controllable Fixed Costs Cost of Goods Sold Selling and Administrative Total Controllable Fixed Costs 194,000 Controllable Margin 93,000 i 72,000 i 179,000 i 203.000 225,000 (b) Assume the division is an investment center, and average operating assets were $1,000,000. The noncontrollable fixed costs are controllable at the investment center level. Compute ROI using the actual amounts. (Round ROI to 1 decimal place, e.g. 1.5.) Return on investment %
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