Horatio Inc. has three divisions which are operated as profit centers. Actual op

Question

Horatio Inc. has three divisions which are operated as profit centers. Actual operating data for the divisions listed alphabetically are as follows: Compute the missing amounts. ating Data Women's Shoes Men's Shoes Children's Shoes Contribution margin Controllable fixed costs Controllable margin Sales Variable costs $312,120 $208,080 115,600 109,820 104,040 520,200 369,920 693,600 289,000 Prepare a responsibility report for the Women's Shoes Division assuming (1) the data are for the month ended June 30, 2017, and (2) all data equal budget except variable costs which are $5,780 over budget. HORATIO INC. Women's Shoe Division For the Month Ended June 30, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Bud Actual

Explanation / Answer

1.

Formulae used:

Sales - Variable costs = Contribution margin

Contribution margin - Controllable fixed costs = Controllable margin

2.

Operating Data Women's Shoes Men's Shoes Children's Shoes Contribution margin 312120 150280 208080 Controllable fixed costs 115600 46240 98260 Controllable margin 196520 104040 109820 Sales 693600 520200 497080 Variable costs 381480 369920 289000

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