The service division of Retro Industries reported the following results for 2016. Sales........................................$500,000 Controllable fixed costs...................$ 75,000

Question:

The service division of Retro Industries reported the following results for 2016.
Sales........................................$500,000
Controllable fixed costs...................$ 75,000
Variable costs...............................300,000
Average operating assets..................450,000
Management is considering the following independent courses of action in 2017 in order to maximize the return on investment for this division.
1. Reduce average operating assets by $50,000, with no change in controllable margin.
2. Increase sales by $100,000, with no change in the percentage.
Instructions
(a) Calculate the controllable margin and there turn on investment for 2016.
(b) Calculate the controllable margin and the on investment for each proposed alternative.
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