Compute the expected roi in 2013 for the home division

Reference no: EM13582172

Suppan Manufacturing Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2012, and relevant budget data are as follows.

	Actual	Comparison with Budget
Sales	$1,500,690	$100,140	favorable
Variable cost of goods sold	693,690	60,290	unfavorable
Variable selling and administrative expenses	124,550	24,250	unfavorable
Controllable fixed cost of goods sold	169,540	On target
Controllable fixed selling and administrative expenses	79,340	On target

Average operating assets for the year for the Home Division were $2,500,190 which was also the budgeted amount.

Compute the expected ROI in 2013 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 1 decimal place, e.g. 1.5.)

		The expected ROI
(1)	Variable cost of goods sold is decreased by 7%.		%
(2)	Average operating assets are decreased by 11%.		%
(3)	Sales are increased by $200,800, and this increase is expected to increase contribution margin by $90,480.		%

Reference no: EM13582172

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