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In: Accounting

The Asphalt Division of Sierra Industries is operated as a profit center. Sales for the division...

The Asphalt Division of Sierra Industries is operated as a profit center. Sales for the division were budgeted for 2016 at $1,200,000. The only variable costs budgeted for the division were cost of goods sold ($590,000) and selling and administrative ($80,000). Fixed costs were budgeted at $130,000 for cost of goods sold, $120,000 for selling and administrative and $95,000 for noncontrollable fixed costs. Actual results for these items were:

                                            Sales                                       $1,185,000

                                            Cost of goods sold

                                                Variable                                    545,000

                                                Fixed                                        140,000

                                            Selling and administrative

                                                Variable                                      82,000

                                                Fixed                                          90,000

                                            Noncontrollable fixed                   105,000

Instructions

a. Prepare a responsibility report for the Asphalt Division for 2016.

b. Assume the division is an investment center, and average operating assets were $1,200,000. Compute ROI.

Solutions

Expert Solution

ekkarill92 answered 11 months ago
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