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The West Division of Nieto Company reported the following data for the current year. Sales $3,003,900 Variable costs 2,040,700 Controllable fixed costs 590,930 Average operating
The West Division of Nieto Company reported the following data for the current year. Sales $3,003,900 Variable costs 2,040,700 Controllable fixed costs 590,930 Average operating assets 5,089,400 Top management is unhappy with the investment center's return on investment (ROI). It asks the manager of the West Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action. Increase sales by $320,490 with no change in the contribution margin percentage. Reduce variable costs by $152,440. Reduce average operating assets by 3%. Compute the return on investment (ROI) for the current year. (Round ROI to 1 decimal place, e.g. 1.5%.) Using the ROI formula, compute the ROI under each of the proposed courses of action. (Round ROI to 1 decimal place, e.g. 1.5%.)
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