Reference no: EM132755806
The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2020 at $900,000. The only variable costs budgeted for the division were 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 noncontrollable fixed costs. Actual results for these items were:
Problem 1: Make a responsibility report for a profit center, and compute ROI.
Sales $880,000
Cost of goods sold
Variable 408,000
Fixed 105,000
Selling and administrative
Variable 61,000
Fixed 66,000
Noncontrollable fixed 90,000