Exercise 22-16 (Part Level Submission) The Sports Equipment Division of Harringt

Question

Exercise 22-16 (Part Level Submission) The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2017 at $900,000. The only variable costs budgeted for the division were cost of goods sold ($440,000) and selling and administrative ($60,000). Fixed costs were budgeted at $100,000 for cost of goods sold, $90,000 for selling and administrative, and $70,000 for noncontrollable fixed costs. Actual results for these items were: Sales $880,000 Cost of goods sold Variable 408,000 Fixed 105,000 Selling and administrative 61,000 66,000 90,000 Variable Fixed Noncontrollable fixed

Explanation / Answer

ROI = net operating income/average operating assets (240,000-90,000)/1,000,000 15.00% answer

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