The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2017 at $900,660. The only variable costs budgeted for the division were cost of goods sold ($442,410) and selling and administrative ($62,050). Fixed costs were budgeted at $101,520 for cost of goods sold, $89,750 for selling and administrative, and $69,820 for noncontrollable fixed costs. Actual results for these items were:

Sales $888,900
Cost of goods sold
Variable 419,540
Fixed 106,680
Selling and administrative
Variable 60,800
Fixed 73,180
Noncontrollable fixed 89,660
The Sports Equipment Division of Harrington Compan
The Sports Equipment Division of Harrington Compan

Prepare a responsibility report for the Sports Equipment Division for 2017. (List variable costs before fixed costs.)

Assume the division is an investment center, and average operating assets were $1,169,100. The noncontrollable fixed costs are controllable at the investment center level. Compute ROI. (Round ROI to 1 decimal place, e. g. 1.5.)

Return on investment

%

Answer and Explanation:

The preparation of the responsibility report is presented below:

Particulars    Budget     Actual           difference

Sales          $900,660    $888,900   $11,760 F

Variable costs      

Cost of goods sold$442,410   $419,540   $22,870 F

Selling and administrative$62,050 $60,800    $1,250 F

Less: total variable costs  $504,460$480,340$24,120 F

Contribution margin          $396,200  $408,560     $12,360 F  (A)

Controllable fixed costs    

cost of goods sold   $101,520      $106,680   $5,160 U

Add or less: Selling and administrative $89,750  $73,180   $16,570 F

Less: total controllable fixed cost$191,270 $179,180  $11,410 F (B)

controllable margin  $204,930 $229,380 $23,770 F (A - B)

Now

Return on investment is

= ($229,380 - $89,660) ÷ $1,169,100

= 11.9%

The favorable variance leads when the standard cost is more than the actual cost while the unfavorable variance leads when the standard cost is less than the actual cost

c.

explanation:

regressive tax taxes the poor and less of the wealthy. this the rich get richer and the poor get more poor. this would create a large wealth gap.