The Sports Equipment Division of Duncan Donnegal Company is operated as a profit center. Sales for the division were budgeted for 2011 at $900,000. The only variable costs budgeted for the division was cost of goods sold ($440,000) and selling and administrative ($60,000). Fixed costs were budgeted at $100,000 for cost of goods sold, $90,000 for selling and administrative and $70,000 for no controllable fixed costs. Actual results for these items were:

Sales ......... $880,000

Cost of goods sold

Variable ........ 409,000

Fixed .......... 105,000

Selling and administrative

Variable .......... 61,000

Fixed .......... 67,000

Noncontrollable fixed ... 80,000

Instructions

(a) Prepare a responsibility report for the Sports Equipment Division for 2011.

(b) 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.