Alosio Manufacturing Company manufactures a variety of tools and industrial equipment. The company operates three divisions. Each division is an investment centre. Operating data for the home division for the year ended December 31, 2012, and relevant budget data are as follows:

Average operating assets for the year for the home division were $2.5 million, which was also the budgeted amount.
Instructions
(a) Prepare a responsibility report (in thousands of dollars) for the home division.
(b) Evaluate the manager's performance. Which items will likely be investigated by top management?
(c) Calculate the expected ROI in 2013 for the home division, assuming the following independent changes to actual data:
1. The variable cost of goods sold decrease by 6%.
2. The average operating assets decrease by 10%.
3. Sales increase by $200,000, and this increase is expected to increase the contribution margin by $90,000.

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Actual Comparison with Budget Sales Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative expenses $1,500,000 700,000 125,000 170,000 80,000 $100,000 favourable 60,000 unfavourable 25,000 unfavourable On target On target