The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2017 at $900,000. The only variable costs budgeted for the division were cost of goods sold ($440,000) and selling and administrative ($60,000). Fixed costs were budgeted at $100,000 for cost of goods sold, $90,000 for selling and administrative, and $70,000 for noncontrollable fixed costs. Actual results for these items were:
Sales | $880,000 |
Cost of goods sold Variable | 408,000 |
Fixed | 105,000 |
Selling and administrative Variable | 61,000 |
Fixed | 66,000 |
Noncontrollable fixed | 90.000 |
Instructions
(a) Prepare a responsibility report for the Sports Equipment Division for 2017.
(b) Assume the division is an investment center, and average operating assets were $1,000,000. The noncontrollable fixed costs are controllable at the investment center level. Compute
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