Using the following data, estimate the new Return on Investment if there is a 9% decrease in variable and fixed costs- with average operating assets as the base. Sales $3,023,201 Contribution margin 37% Controllable fixed costs 244,010 Average operating assets $5,136,160 Round to two decimal places. Be sure to enter the answer as a percentage but do not include the % sign.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Using the following data, estimate the new Return on Investment if there is a 9% decrease in variable and fixed costs- with average operating assets as the base.
| Sales | $3,023,201 |
| Contribution margin | 37% |
| Controllable fixed costs | 244,010 |
| Average operating assets | $5,136,160 |
Round to two decimal places. Be sure to enter the answer as a percentage but do not include the % sign.
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