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He is allowed to try his plan in December and had the following results. RC Outdoor Company Winter Sports Department Results For the Month Ended December 31, 2020 Sales in units Variable expenses 5,500

He is allowed to try his plan in December and had the following results. RC Outdoor Company Winter Sports Department Results For the Month Ended December 31, 2020 Sales in units Variable expenses 5,500

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 18E: Carmichael Corporation is in the process of preparing next years budget. The pro forma income...
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After Roberts because familiar with the flexible budget report, he began to analyze the numbers. Roberts feels that sales can be increased if RC Outdoor Company would increase sales commissions to $29.00 per unit. This would allow them to reduce advertising expense to $7.50 per unit. Roberts thinks that these changes will motivate the sales staff to sell at least 5,500 units. He is allowed to try his plan in December and had the following results. RC Outdoor Company Winter Sports Department Results For the Month Ended December 31, 2020 Sales in units Variable expenses Sales commissions Advertising expense Travel expense Demonstration models given out Total variable Fixed expenses Rent Sales salaries Budget $ $152,900 $ 5,500 39,150 251,300 105,200 $ 548,550 8,100 59,500 Actual Per Unit $ $ Budget Difference Favorable Unfavorable Neither Favorable nor Unfavorable $ Actual
Transcribed Image Text:After Roberts because familiar with the flexible budget report, he began to analyze the numbers. Roberts feels that sales can be increased if RC Outdoor Company would increase sales commissions to $29.00 per unit. This would allow them to reduce advertising expense to $7.50 per unit. Roberts thinks that these changes will motivate the sales staff to sell at least 5,500 units. He is allowed to try his plan in December and had the following results. RC Outdoor Company Winter Sports Department Results For the Month Ended December 31, 2020 Sales in units Variable expenses Sales commissions Advertising expense Travel expense Demonstration models given out Total variable Fixed expenses Rent Sales salaries Budget $ $152,900 $ 5,500 39,150 251,300 105,200 $ 548,550 8,100 59,500 Actual Per Unit $ $ Budget Difference Favorable Unfavorable Neither Favorable nor Unfavorable $ Actual
Do you think the new plan is valid? Explain. ew plan is a Fixed expenses Rent Sales salaries Office salaries $ Depreciation - vans (sales staff) Total fixed Total expenses as favorable total variance is 8,100 59,500 39,800 3,000 110,400 $ $658,950 D ✓by $ 4 than in November. Prepare a budget report based on flexible budget data. The new depreciation amount has been included in the budgeted fixed costs. (Round per unit answers to 2 decimal places, e.g. 15.25.) RC Outdoor Company Winter Sports Department Flexible Budget Report
Transcribed Image Text:Do you think the new plan is valid? Explain. ew plan is a Fixed expenses Rent Sales salaries Office salaries $ Depreciation - vans (sales staff) Total fixed Total expenses as favorable total variance is 8,100 59,500 39,800 3,000 110,400 $ $658,950 D ✓by $ 4 than in November. Prepare a budget report based on flexible budget data. The new depreciation amount has been included in the budgeted fixed costs. (Round per unit answers to 2 decimal places, e.g. 15.25.) RC Outdoor Company Winter Sports Department Flexible Budget Report
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