The Pacific Division of Ivanhoe Industries reported the following data for the current year. Sales $4,108,240...

Transcribed Image Text:

The Pacific Division of Ivanhoe Industries reported the following data for the current year. Sales $4,108,240 Variable costs 2,615,000 Controllable fixed costs 815,000 Average operating assets 5,024,000 Top management is unhappy with the investment center's return on investment. It asks the manager of the Pacific Division to submit plans to improve ROl in the next year. The manager believes it is feasible to consider the following independent courses of action. 1. Increase sales by $415,000 with no change in the contribution margin percentage. 2. Reduce variable costs by $135,648. 3. Reduce average operating assets by 4% (a) Your answer has been saved. See score details after the due date. Compute the return on investment for the current year. (Round answers to 1 decimal place, e.g. 52.7%.) Return on investment 13.5 % Using ROI formula, compute the ROl under each of the proposed courses of action. (Round answers to 1 decimal place, e.g. 52.7%.) Courses of action ROI 1. 3. 2. The Pacific Division of Ivanhoe Industries reported the following data for the current year. Sales $4,108,240 Variable costs 2,615,000 Controllable fixed costs 815,000 Average operating assets 5,024,000 Top management is unhappy with the investment center's return on investment. It asks the manager of the Pacific Division to submit plans to improve ROl in the next year. The manager believes it is feasible to consider the following independent courses of action. 1. Increase sales by $415,000 with no change in the contribution margin percentage. 2. Reduce variable costs by $135,648. 3. Reduce average operating assets by 4% (a) Your answer has been saved. See score details after the due date. Compute the return on investment for the current year. (Round answers to 1 decimal place, e.g. 52.7%.) Return on investment 13.5 % Using ROI formula, compute the ROl under each of the proposed courses of action. (Round answers to 1 decimal place, e.g. 52.7%.) Courses of action ROI 1. 3. 2.

Answer rating: 100% (QA)

aReturn on investmentROINet operating incomeAverage operating assets Sales 410... View the full answer