The West Division of Sophia Industries
Get your Assignment in a Minimum of 3 hours
Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.
Free InquiryThe West Division of Sophia Industries reported the following data for the current year.
Sales $4,000,000
Variable costs 2,600,000
Controllable fixed costs 800,000
Average operating assets 5,000,000
Top management is unhappy with the investment center’s return on investment (ROI). It asks the manager of the West Division to submit plans to improve ROI in the next year. The manager believes it is feasible to consider the following independent courses of action.
1. Increase sales by $400,000 with no change in the contribution margin percentage.
2. Reduce variable costs by $120,000.
3. Reduce average operating assets by 4%
Instructions
(a) Compute the return on investment (ROI) for the current year.
(b) Using the ROI formula, compute the ROI under each of the proposed courses of action. (Round to one decimal.)
"Is this question part of your assignment? We Can Help!"
"Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!"
Get Started