Upon further analysis, Custer Company determined that if it committed to a 12 month advertising campaign costing $18,000, they could increase budgeted sales by 25%. Variable costs also will increase by 25%. Fixed cost of goods sold would remain at $77,000 and selling and administrative expenses increases by the $18,000 cost of this contract to a total of $88,000. Noncontrollable fixed costs would remain at $69,000. This plan resulted in the following results: Sales $873,000 Cost of goods sold Variable 420,000 Fixed 81,000 Selling and administrative Variable 56,000 Fixed 71,000 Noncontrollable fixed 69,000 (1) Prepare a responsibility report for the Camping Division based on the new projections. Did the increase in advertising benefit the company? (2) 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. Discuss the impact of the change on ROI.

Camping Division
Responsibility Report
For the Year Ended December 31, 2020
						Difference
						Favorable (F)
				Budget	Actual	Unfavorable (U)
Sales
Variable
COGS
Selling & Ad
Total
Contribution Margin
Fixed
COGS
S&A
Total
Controllable Margin