Rhein Manufacturing Recorded Operating Data for Its Auto Accessories Division

Rhein Manufacturing recorded operating data for its auto accessories division for the year. $$\begin{array} { l r } \text { Sales } & \$ 750,000 \\\text { Contribution margin } & 150,000 \\\text { Total direct fixed costs } & 90,000 \\\text { Average total operating assets } & 400,000\end{array}$$ How much is ROI for the year if management is able to identify a way to improve the contribution margin by $30,000, assuming fixed costs are held constant?

A) 45.0%
B) 22.5%
C) 15.0%
D) 12.0%

Correct Answer:

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