#43 Lombard, Inc. has two Investment centers and has developed the following Inf

Question

#43

Lombard, Inc. has two Investment centers and has developed the following Information: Answer the following questions about Department A and Department B. What was the amount of Department A's average operating assets Average Operating Assets What was the amount of Department B's controllable margin Controllable Margin If Department B is able to reduce its operating assets by $100,000, what would be Department B's new ROI New ROI If Department A is able to increase its controllable margin by $60,000 as a result of reducing variable costs, what would be Department A's new ROI New ROI

Explanation / Answer

Operating Assets of A Contribution = Operating Assets* Return 120000= x*10% Operating Assets = $ 1200000 Department B Contribution = 400000*12% 48000

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