Brief Exercise 22-8 For the year ending December 31, 2017, Cobb Company accumula

Question

Brief Exercise 22-8 For the year ending December 31, 2017, Cobb Company accumulates the following data for the Plastics Division which it operates as an investment center: contribution margin—$709,850 budget, $719,685 actual; controllable fixed costs—$301,400 budget, $305,400 actual. Average operating assets for the year were $1,945,000.
Prepare a responsibility report for the Plastics Division beginning with contribution margin. (Round ROI to 1 decimal place, e.g. 1.5.)







Brief Exercise 22-8 For the year ending December 31, 2017, Cobb Company accumulates the following data for the Plastics Division which it operates as an investment center: contribution margin-$709,850 budget, $719,685 actual; controllable fixed costs-$301,400 budget, $305,400 actual. Average operating assets for the year were $1,945,000 Prepare a responsibility report for the Plastics Division beginning with contribution margin. (Round ROI to 1 decimal place, e.g. 1.5. COBB COMPANY Plastics Division Responsibility Report For the Year Ended December 31, 2017 Favarable Uefavorable Neither Faerabe nor Unfaverable Budget Actual Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

Responsibility Budget for year ending December 2017 Type Budget Actual Difference (Budget - Actual) Favorable / Unfavorable Contribution margin 709850 719685 9835 Favorable Controllable fixed costs 301400 305400 -4000 Unfavorable Contrablle Margin (Contribution margin - Controllable fixed costs) 408450 414285 5835 Favorable Return on operating assets (Controllable margin / Operating assets) 21% (408450/ 1945000) 21.3% (414285/1945000) 0.30% Favorable

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