Exercise 22-9 SORIA COMPANY Clothing Department Budget Report For the Month Ende
ID: 2574598 • Letter: E
Question
Exercise 22-9
SORIA COMPANY
Clothing Department
Budget Report
For the Month Ended October 31, 2017
Difference
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
8,300
11,000
2,700
$1,992
$2,860
$868
830
1,210
380
3,320
3,850
530
1,992
1,430
562
8,134
9,350
1,216
1,100
1,100
–0–
1,200
1,200
–0–
900
900
–0–
400
400
–0–
3,600
3,600
–0–
$11,734
$12,950
$1,216
SORIA COMPANY
Selling Expense Flexible Budget Report
Clothing Department
For the Month Ended October 31, 2017
Difference
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Open Show Work
Exercise 22-9
As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing Department of Soria Company for the month of October.SORIA COMPANY
Clothing Department
Budget Report
For the Month Ended October 31, 2017
Difference
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
8,300
11,000
2,700
Favorable Variable expenses Sales commissions$1,992
$2,860
$868
Unfavorable Advertising expense830
1,210
380
Unfavorable Travel expense3,320
3,850
530
Unfavorable Free samples given out1,992
1,430
562
Favorable Total variable8,134
9,350
1,216
Unfavorable Fixed expenses Rent1,100
1,100
–0–
Neither Favorable nor Unfavorable Sales salaries1,200
1,200
–0–
Neither Favorable nor Unfavorable Office salaries900
900
–0–
Neither Favorable nor Unfavorable Depreciation—autos (sales staff)400
400
–0–
Neither Favorable nor Unfavorable Total fixed3,600
3,600
–0–
Neither Favorable nor Unfavorable Total expenses$11,734
$12,950
$1,216
UnfavorableAs a result of this budget report, Joe was called into the president’s office and congratulated on his fine sales performance. He was reprimanded, however, for allowing his costs to get out of control. Joe knew something was wrong with the performance report that he had been given. However, he was not sure what to do, and comes to you for advice.
Prepare a budget report based on flexible budget data to help Joe. (List variable costs before fixed costs. Do not leave any answer field blank. Enter 0 for amounts.)
SORIA COMPANY
Selling Expense Flexible Budget Report
Clothing Department
For the Month Ended October 31, 2017
Difference
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Total Variable CostsTotal CostsFixed CostsRentTotal Fixed CostsAdvertising ExpenseTravel ExpenseSales in UnitsDepreciation—Sale Staff AutosVariable CostsFree SamplesOffice SalariesSales CommissionsSales Salaries
Depreciation—Sale Staff AutosVariable CostsSales in UnitsSales CommissionsFixed CostsTotal Fixed CostsTotal Variable CostsRentFree SamplesOffice SalariesSales SalariesTravel ExpenseTotal CostsAdvertising Expense
Depreciation—Sale Staff AutosSales CommissionsAdvertising ExpenseTotal CostsFixed CostsTotal Fixed CostsRentSales in UnitsTravel ExpenseTotal Variable CostsSales SalariesVariable CostsFree SamplesOffice Salaries
$ $ $UnfavorableFavorableNeither Favorable nor Unfavorable
Total Fixed CostsTotal CostsOffice SalariesFree SamplesRentFixed CostsTravel ExpenseSales SalariesSales CommissionsSales in UnitsTotal Variable CostsVariable CostsAdvertising ExpenseDepreciation—Sale Staff Autos
FavorableUnfavorableNeither Favorable nor Unfavorable
Variable CostsSales in UnitsDepreciation—Sale Staff AutosSales SalariesTotal Variable CostsTotal CostsTotal Fixed CostsFixed CostsTravel ExpenseAdvertising ExpenseFree SamplesOffice SalariesRentSales Commissions
UnfavorableFavorableNeither Favorable nor Unfavorable
Total Fixed CostsTotal Variable CostsRentSales CommissionsTravel ExpenseAdvertising ExpenseSales SalariesVariable CostsFree SamplesDepreciation—Sale Staff AutosFixed CostsOffice SalariesTotal CostsSales in Units
UnfavorableNeither Favorable nor UnfavorableFavorable
Sales in UnitsTotal CostsTotal Fixed CostsTravel ExpenseDepreciation—Sale Staff AutosFree SamplesSales SalariesTotal Variable CostsVariable CostsRentAdvertising ExpenseSales CommissionsOffice SalariesFixed Costs
Neither Favorable nor UnfavorableUnfavorableFavorable
Total CostsTotal Fixed CostsDepreciation—Sale Staff AutosSales in UnitsAdvertising ExpenseSales CommissionsVariable CostsSales SalariesRentTotal Variable CostsFixed CostsFree SamplesTravel ExpenseOffice Salaries
Free SamplesSales CommissionsOffice SalariesRentTotal CostsDepreciation—Sale Staff AutosSales in UnitsSales SalariesTotal Fixed CostsFixed CostsTotal Variable CostsAdvertising ExpenseTravel ExpenseVariable Costs
UnfavorableNeither Favorable nor UnfavorableFavorable
Sales in UnitsTravel ExpenseSales SalariesOffice SalariesTotal CostsRentTotal Fixed CostsVariable CostsAdvertising ExpenseFixed CostsFree SamplesTotal Variable CostsDepreciation—Sale Staff AutosSales Commissions
UnfavorableFavorableNeither Favorable nor Unfavorable
Total CostsAdvertising ExpenseSales CommissionsFree SamplesTravel ExpenseDepreciation—Sale Staff AutosFixed CostsOffice SalariesRentSales SalariesVariable CostsTotal Fixed CostsSales in UnitsTotal Variable Costs
Neither Favorable nor UnfavorableUnfavorableFavorable
Sales in UnitsTotal Variable CostsVariable CostsOffice SalariesRentAdvertising ExpenseFree SamplesSales SalariesDepreciation—Sale Staff AutosTotal CostsTotal Fixed CostsSales CommissionsFixed CostsTravel Expense
FavorableNeither Favorable nor UnfavorableUnfavorable
Sales in UnitsSales SalariesTotal CostsTotal Variable CostsOffice SalariesFree SamplesDepreciation—Sale Staff AutosTravel ExpenseTotal Fixed CostsVariable CostsAdvertising ExpenseSales CommissionsRentFixed Costs
UnfavorableFavorableNeither Favorable nor Unfavorable
Depreciation—Sale Staff AutosTotal CostsSales SalariesTotal Fixed CostsTotal Variable CostsTravel ExpenseVariable CostsRentFree SamplesFixed CostsAdvertising ExpenseOffice SalariesSales CommissionsSales in Units
$ $ $UnfavorableNeither Favorable nor UnfavorableFavorable
Click if you would like to Show Work for this question:Open Show Work
Explanation / Answer
Flexible Budget Flexible Actual sales in units 11000 11000 variable expense sales commission 2640 [1992*11000/8300] 2860 220 U Advertising expense 1100 [830*11000/8300] 1210 110 U travel expense 4400 [3320*11000/8300] 3850 -550 F Free samples given out 2640 [1992*11000/8300] 1430 -1210 F Total variable cost 10780 9350 -1430 F Fixed expense Rent 1100 1100 0 NA sales salaries 1200 1200 0NA office salaries 900 900 0NA Depreciation-autos 400 400 0NA Total fixed cost 360 3600 0NA Total cost 14380 12950 -1430 F
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