The Pacific Division of Crane Industries reported the following data for the current year. ...
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Accounting
The Pacific Division of Crane Industries reported the following data for the current year.
Sales
$4,015,342
Variable costs
2,602,000
Controllable fixed costs
802,000
Average operating assets
5,011,000
Top management is unhappy with the investment centers return on investment. 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 $402,000 with no change in the contribution margin percentage.
2.
Reduce variable costs by $120,264.
3.
Reduce average operating assets by 4%
Using ROI formula, compute the ROI under each of the proposed courses of action. (Round answers to 1 decimal place, e.g. 52.7%.) Courses of action ROI 1. % 2. % 3. %
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