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Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2020, and relevant budget data are as follows. Actual Comparison with Budget Sales $1,399,000 $100,000 favorable Variable cost of goods sold 680,000 55,000 unfavorable Variable selling and administrative expenses 126,000 25,000 unfavorable Controllable fixed cost of goods sold 169,000 On target Controllable fixed selling and administrative expenses 80,000 On target Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted amount. OPTIMUS COMPANY Home Division Responsibility Report For the Year Ended December 31, 2020 Budget Actual Sales $ 1299000 $ 1399000 $ Variable Costs Cost of Goods Sold 625000 i 680000 i Selling and Administrative 101000 126000 i Total Variable Costs V 726000 806000 i Contribution Margin 573000 593000 Controllable Direct Fixed Costs Cost of Goods Sold 169000 i 169000 i Selling and Administrative 80000 i 80000 i Total Controllable Direct Fixed Costs 249000 i 249000 i ollable Margin $ 324000 $ 344000 ROI 16.2 % 17.2 % OPTIMUS COMPANY Home Division Responsibility Report For the Year Ended December 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Actual 1399000 100000 Favorable 680000 i 55000 i Unfavorable 126000 i 25000 i Unfavorable 806000 i 80000 Unfavorable 593000 20000 Favorable 169000 i 0 Neither Favorable nor Unfavorable V 80000 i 0 Neither Favorable nor Unfavorable 249000 0 Neither Favorable nor Unfavorable 344000 $ 20000 Favorable % 17.2 % 1 % Favorable (c) Your answer is partially correct. Compute the expected ROI in 2020 for the Home Division, assuming the following independent changes to actual data. (Round ROI to 2 decimal places, e.g. 1.57%.) The expected ROI (1) Variable cost of goods sold is decreased by 6%. 18.2 % (2) Average operating assets are decreased by 20.0%. 21.5 % (3) Sales are increased by $200,000, and this increase is expected to increase contribution margin by $84,000. 23 %