Exercise 22-13 (Part Level Submission) Fey Company\'s organization chart include

Question

Exercise 22-13 (Part Level Submission) Fey Company's organization chart includes the president; the vice president of production; three assembly plants-Dallas, Atlanta, and Tucson; and two departments within each plant-Machining and Finishing. Budget and actual manufacturing cost data for July 2017 are as follows Finishing Department-Dallas: direct materials $41,720 actual, $45,060 budget; direct labor $83,720 actual, $81,610 budget; manufacturing overhead $52,520 actual, $50,160 budget. Machining Department-Dallas: total manufacturing costs $220,340 actual, $218,450 budget. Atlanta Plant: total manufacturing costs $423,470 actual, $423,050 budget. Tucson Plant: total manufacturing costs $495,230 actual, $497,140 budget. The Dallas plant manager's office costs were $97,860 actual and $94,000 budget. The vice president of production's office costs were $134,440 actual and $134,870 budget. Office costs are not allocated to departments and plants Prepare the reports in a responsibility system for: The Finishing Department-Dallas To Dallas Department ishing Month: July Favorable Unfavorable Neither Favorable nor Unfavorable Controllable Costs: Budget Actual Total Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

(a) ROI = Controllable margin / Average operating assets

North Division:

ROI = $139,900 / $932,667 = 15%

West Division:

ROI = $360,000 / $1,440,000 = 25%

South Division:

ROI = $210,100 / $1,400,667 = 15%

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