vari- able costs budgeted

E10-16  The Sports Equipment Division of Duncan Donnegal Company is operated as a profit center. Sales for the division were budgeted for 2011 at $900,000. The only vari- able costs budgeted for the division were cost of goods sold ($440,000) and selling and administrative ($60,000). Fixed costs were budgeted at $100,000 for cost of goods sold,

$90,000 for selling and administrative and $70,000 for noncontrollable fixed costs. Ac- tual results for these items were:

Instructions

(a)   Prepare a responsibility report for the Sports Equipment Division for 2011.

(b)   Assume the division is an investment center, and average operating assets were

$1,000,000. The noncontrollable fixed costs are controllable at the investment center level. Compute ROI.