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P10-5A Suppan Company manufactures a variety of tools and industrial equipment. The company… 1 answer below » P10-5A Suppan Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operat- ing data for the Home Division for the year ended December 31, 2014, and relevant budget data are as follows. Actual Comparison with Budget Sales & View complete question » P10-5A Suppan Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operat- ing data for the Home Division for the year ended December 31, 2014, and relevant budget data are as follows. Actual Comparison with Budget Sales $1,400,000 $100,000 favorable Variable cost of goods sold 675,000 55,000 unfavorable Variable selling and administrative expenses 125,000 25,000 unfavorable Controllable fixed cost of goods sold 170,000 On target Controllable fixed selling and administrative expenses 80,000 On target Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted amount. Instructions (a) Prepare a responsibility report (in thousands of dollars) for the Home Division. (b) Evaluate the manager’s performance. Which items will likely be investigated by top management? (c) Compute the expected ROI in 2014 for the Home Division, assuming the following independent changes to actual data. (1) Variable cost of goods sold is decreased by 5%. (2) Average operating assets are decreased by 10%. (3) Sales are increased by $200,000, and this increase is expected to increase contri- bution margin by $85,000. View less » Nov 30 2015 04:46 PM
