KMC Manufacturing Company makes garden and lawn equipment. The company operates through three divisions. Each division is an investment centre. Operating data for the lawn mower division for the year ended December 31, 2020, and relevant budget data are as follows: ActualComparison with BudgetSales$2,900,000$150,000unfavourableVariable cost of goods sold1,400,000100,000unfavourableVariable selling and administrative expenses300,000 40,000 favourable Controllable fixed cost of goods sold270,000 On target Controllable fixed selling and administrative expenses140,000 On target Average operating assets for the year for the lawn mower division were $5million, which was also the budgeted amount.Required:Prepare a responsibility report (in thousands of dollars) for the lawnmower division.Calculate the expected ROI in 2020 for the KMC division, assuming the following independent changes:The variable cost of goods sold decreases by 20%.The average operating assets decrease by 24%.

1) Preparation of responsibility budget for the Lawn mower division Actual Budget…

Answered: KMC Manufacturing Company makes garden…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 10CE: Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects...

See similar textbooks

Related questions

Concept explainers

Question

KMC Manufacturing Company makes garden and lawn equipment. The company operates through three divisions. Each division is an investment centre. Operating data for the lawn mower division for the year ended December 31, 2020, and relevant budget data are as follows:

	Actual	Comparison with Budget
Sales	$2,900,000	$150,000	unfavourable
Variable cost of goods sold	1,400,000	100,000	unfavourable
Variable selling and administrative expenses	300,000	40,000	favourable
Controllable fixed cost of goods sold	270,000		On target
Controllable fixed selling and administrative expenses	140,000		On target

Average operating assets for the year for the lawn mower division were $5
million, which was also the budgeted amount.

Required:

Prepare a responsibility report (in thousands of dollars) for the lawn
mower division.
Calculate the expected ROI in 2020 for the KMC division, assuming the following independent changes:
1. The variable cost of goods sold decreases by 20%.
2. The average operating assets decrease by 24%.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions