Prepare a responsibility report for the Patio Furniture Division for the year.
Chapter7: Budgeting
Section: Chapter Questions
Problem 6TP: The management of Hess, Inc., is developing a flexible budget for the upcoming year. It was not...
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Question
Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2020, are as shown below.
Budget
|
Difference
from Budget |
||||
Sales | $2,490,200 | $48,000 |
Favorable
|
||
Cost of goods sold | |||||
Variable | 1,295,300 | 37,500 |
Favorable
|
||
Controllable fixed | 197,900 | 2,500 |
Unfavorable
|
||
Selling and administrative | |||||
Variable | 211,700 | 6,800 |
Unfavorable
|
||
Controllable fixed | 50,200 | 1,800 |
Unfavorable
|
||
Noncontrollable fixed costs | 68,900 | 4,700 |
Unfavorable
|
In addition, Clarke incurs $183,100 of indirect fixed costs that were budgeted at $175,500. Twenty percent (20%) of these costs are allocated to the Patio Furniture Division.
Prepare a responsibility report for the Patio Furniture Division for the year.
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