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22. Cody Co. developed its annual manufacturing overhead budget for its master budget for 2019 as follows: Expected annual operating capacity 120.000 Direct Labor Hours Variable overhead costs Indirect labor $600,000 Indirect materials 120,000 Factory supplies 60.000 Total variable 780.000 Fixed overhead costs Depreciation 240,000 Supervision 120,000 Property taxes 96.000 Total fixed 456.000 Total costs $1.236.000 The relevant range for monthly activity is expected to be between 8,000 and 12,000 direct labor hours. Instructions Prepare a flexible budget for a monthly activity level of 8,000 and 9,000 direct labor hours. 23. The Pacific Division of Henson 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 Pacific 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.)

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