Verizon Company has two investment centers and has developed the following information:

Product Sales Service Sales

Departmental controllable margin $120,000 ?

Average operating assets ? $400,000

Sales 800,000 250,000

ROI 10% 12%

Instructions

Answer the following questions about Product Sales and Service Sales.

1. What was the amount of Product Sales average operating assets?

$__________________.

2. What was the amount of Service Sales controllable margin? $____________.

3. If Service Sales is able to reduce its operating assets by $100,000, then the new ROI would be ____________.

4. If Product Sales able to increase its controllable margin by $60,000 as a result of reducing variable costs, then the new ROI would be _________________.