w

Lombard, Inc. has two investment centers and has developed the following information: Departmental controllable margin Average operating assets Sales ROI Department A $120,000 ? 800,000 10% Department B ? $400,000 250,000 12% Answer the following questions about Department A and Department B. 1. What was the amount of Department A's average operating assets? Average Operating Assets $ 2. What was the amount of Department B's controllable margin? Controllable Margin $ 3. If Department B is able to reduce its operating assets by $100,000, what would be Department B's new ROI? New ROI % 4. If Department A is able to increase its controllable margin by $60,000 as a result of reducing variable costs, what would be Department A's new ROI? New ROI %