Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of

Question

Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment follows. Actual Comparison with Budget - Sales Variable cost of poods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative expenses Average operating assets for the year for the Home Division were $1,999,000 which was also the budgeted amount $1.400,000 $101,000 favorable 675,000 124,000 171,000 81,000 56,000 unfavorable 24,000 unfavorable On target On target (a) Your answer is correct. Prepare a responsibiläity repor t for the Home Division: (ist variable costs before fixed costs. Round no to 1 decimol place, eg. 1.5) OPTIMUS COMPANY Responsibility Report For the Year Ended Decomber 31, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Seling and l Goods

Explanation / Answer

1 Controllable Margin 349000 ADD Decrease in Variable Cost 40500 Adjusted Controllable Margin 389500 Avereage Operating Asset 1999000 ROI 19.5% 2 Controllable Margin 349000 Avereage Operating Asset 1779110 ROI 19.6% 3 Controllable Margin 349000 Add increase in Margin 86000 Adjusted Controllable Margin 435000 Avereage Operating Asset 1999000 ROI 21.8%

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