Exercise 10-16 The Sports Equipment Division of Harrington Company is operated a

Question

Exercise 10-16 The Sports Equipment Division of Harrington Company is operated as a profift center. Sales for the division were budgeted for 2017 at $891,030. The only varlable costs budçeted for the divislon were cost of goods sold ($441,440) and selling and administrative ($64,340). Fixed costs were budgeted at $103,430 for cost of goods sold, $93,280 for selling and administrative, and $71,200 for Sales $886,690 Cost of goods sold Variable 414,030 Fixed 104,870 Selling and administrative Variable Fixed 63,360 68,480 92,760 Noncontrollable fixed

Explanation / Answer

HARRINGTON COMPANY

Sports Equipment Division

Responsibility Report

2017

Budget Actual Difference Sales 891,080 886,690 4,390 Unfavourable Variable costs : Cost of goods sold 441,440 414,030 27,410 Favourable Selling and administrative 64,340 63,360 980 Favourable Total variable costs 505,780 477,390 28,390 Favourable Contribution margin 385,300 409,300 24,000 Favourable Controllable fixed costs : Cost of goods sold 103,430 104,870 1,440 Unfavourable Selling and administrative 93,280 68,480 24,800 Favourable Total controllable fixed costs 196,710 173,350 23,360 Favourable Controllable margin 188,590 235,950 47,360 Favourable Non controllable fixed costs 71,200 92,760 21,560 Unavourable Operating income 117,390 143,190 25,800 Favourable

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