Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of

Question

Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of tools and industrial squipment. The company operaces through thres divisions. Each diviaion is an investment center Operating data for the Home Division for the year ended Decamber 31. 2017, and relavant budget data are aa follaws Comparison withB $100,000 favorable Actual Seles Variabla coat of goods sold Veriable selling and edministretive expenses Controlable fooad cost of goods sole $1.401.000 674,000 125.000 170,000 79,000 56,000 unfavorabl 25.000 unfavorable On target On target Average operating assers for the year for the Home Division were $2.001.000 vahich was also the budgered amount. Prepere responsibility repot for the Home Division. (List variable costs before fired costs. Round ROI to 1 decimal plec e.g. 1.5.) OPTIIMUS COMPANY For the Year Ended December 31, 2017 Neither Favora ble nor Unfavorable Actual ROI Attemptsi 0 of 3 used

Explanation / Answer

OPTIMUS COMPANY

Home Division

Responsibility Statement

for year ended December 31, 2017

Particulars Budget Actual Variance Difference Favourable/unfavourable/neither favourable nor unfavourable Sales 1,301,000 1,401,000 100,000 Favourable Variable cost of goods sold 618,000 674,000 56,000 Unfavourable Controllable fixed cost of goods sold 170,000 170,000 0 Neither favourable nor unfavourable Gross Margin 513,000 557,000 44,000 Favourable Variable Selling and Administration costs 100,000 125,000 25,000 Unfavourable Controllable fixed selling and administration costs 79,000 79,000 0 Neither favourable nor unfavourable Net Margin 334,000 353,000 19,000 Favourable

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