For its three investment centers, Fantastic Company accumulates the following data: II III Sales $1,700,000 $4,035,000 $4,069,000 Controllable margin 912,240 1,848,390 4,209,800 Average operating assets 5,068,000 7,993,000 12,028,000 The centers expect the following changes in the next year: (I) increase sales 15%; (II) decrease controllable fixed costs $321,000; (III) decrease average operating assets $411,000. Compute the expected return on investment (ROI) for each center. Assume center I has a contribution margin percentage of 65%. (Round ROI to 1 decimal place, e.g. 1.5.)

For its three investment centers, Fantastic Company accumulates the following data: II III Sales $1,700,000 $4,035,000 $4,069,000 Controllable margin 912,240 1,848,390 4,209,800 Average operating assets 5,068,000 7,993,000 12,028,000 The centers expect the following changes in the next year: (I) increase sales 15%; (II) decrease controllable fixed costs $321,000; (III) decrease average operating assets $411,000. Compute the expected return on investment (ROI) for each center. Assume center I has a contribution margin percentage of 65%. (Round ROI to 1 decimal place, e.g. 1.5.)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter11: Performance Evaluation And Decentralization

Section: Chapter Questions

Problem 27E: Margin, Turnover, Return on Investment, Average Operating Assets Elway Company provided the...

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