The Real Estate Products Division of McKenzie Co. is operated as a profit center. Sales for the division were budgeted for 2022 at $1,250,000. The only variable costs budgeted for the division were cost of goods sold ($610,000) and selling and administrative ($80,000). Fixed costs were budgeted at $130,000 for cost of goods sold, $120,000 for selling and administrative costs, and $95,000 for noncontrollable fixed costs. Actual results for these items were as follows: Instructions Sales $1,175,000 Cost of goods sold Variable 545,000 Fixed 140,000 Selling and administrative Variable 82,000 Fixed 100,000 Noncontrollable fixed 105,000 (a) Prepare a responsibility report for the Real Estate Products Division for 2022. (b) Compute ROI assuming the division is an investment center, and average operating assets were $1,200,000.

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
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The Real Estate Products Division of McKenzie Co. is operated as a profit center. Sales for the division
were budgeted for 2022 at $1,250,000. The only variable costs budgeted for the division were cost of
goods sold ($610,000) and selling and administrative ($80,000). Fixed costs were budgeted at
$130,000 for cost of goods sold, $120,000 for selling and administrative costs, and $95,000 for
noncontrollable fixed costs. Actual results for these items were as follows:
Instructions
Sales
$1,175,000
Cost of goods sold
Variable
545,000
Fixed
140,000
Selling and administrative
Variable
82,000
Fixed
100,000
Noncontrollable fixed
105,000
(a) Prepare a responsibility report for the Real Estate Products Division for 2022.
(b) Compute ROI assuming the division is an investment center, and average operating assets were
$1,200,000.
Transcribed Image Text:The Real Estate Products Division of McKenzie Co. is operated as a profit center. Sales for the division were budgeted for 2022 at $1,250,000. The only variable costs budgeted for the division were cost of goods sold ($610,000) and selling and administrative ($80,000). Fixed costs were budgeted at $130,000 for cost of goods sold, $120,000 for selling and administrative costs, and $95,000 for noncontrollable fixed costs. Actual results for these items were as follows: Instructions Sales $1,175,000 Cost of goods sold Variable 545,000 Fixed 140,000 Selling and administrative Variable 82,000 Fixed 100,000 Noncontrollable fixed 105,000 (a) Prepare a responsibility report for the Real Estate Products Division for 2022. (b) Compute ROI assuming the division is an investment center, and average operating assets were $1,200,000.
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