The service division of Metro Industries reported the following results for 2014.
Sales $500,000
Variable costs 320,000
Controllable fixed costs 40,800
Average operating assets 280,000
Management is considering the following course of action in 2015 in order to maximize the return on investment.
Compute controllable margin and the expected return on investment for 2015.
Controllable margin is $180,000; expected return on investment for 2015 is 20.4%
Controllable margin is $180,000; expected return on investment for 2015 is 49.7%.
Controllable margin is $40,800; expected return on investment for 2015 is 20.4%.
Controllable margin is $139,200; expected return on investment for 2015 is 69.6%
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