The Sports Equipment Division of Harrington Company is operated as a profit cent

Question

The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2017 at $893,450. The only variable costs budgeted for the division were cost of goods sold ($443,980) and selling and administrative ($61,920). Fixed costs were budgeted at $100,410 for cost of goods sold, $90,930 for selling and administrative, and $74,480 for noncontrollable fixed costs. Actual results for these items were:

Exercise 22-16 (Part Level Submission) The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2017 at $893,450. The only variable costs budgeted for the division were cost of goods sold ($443,980) and selling and administrative ($61,920). Fixed costs were budgeted at $100,410 for cost of goods sold, $90,930 for selling and administrative, and $74,480 for noncontrollable fixed costs. Actual results for these items were: Sales Cost of goods sold $881,840 415,370 104,160 Variable Fixed Selling and administrative 65,700 71,330 89,550 Variable Fixed Noncontrollable fixed

Explanation / Answer

Answer:

2017

Particulars

Budgeted

Actual

Variance

Actual - Budgeted

sales  

893450

881840

11610

Unfavorable

less:

Variable costs for COGS

443980

415370

28610

Favorable

Selling & Administrative cost

61920

65700

3780

Unfavourable

Total variable cost

505900

481070

24830

Favourable

Contribution margin

387550

400770

13220

Favourable

less:

Fixed cost (Controable)COGS

100410

104160

3750

Unfavourable

Selling & Administrative

90930

71330

19600

Favourable

total controlable fixed cost

191340

175490

15850

Favourable

Controlable margin  

196210

225280

29070

Favourable

2017

Particulars

Budgeted

Actual

Variance

Actual - Budgeted

sales  

893450

881840

11610

Unfavorable

less:

Variable costs for COGS

443980

415370

28610

Favorable

Selling & Administrative cost

61920

65700

3780

Unfavourable

Total variable cost

505900

481070

24830

Favourable

Contribution margin

387550

400770

13220

Favourable

less:

Fixed cost (Controable)COGS

100410

104160

3750

Unfavourable

Selling & Administrative

90930

71330

19600

Favourable

total controlable fixed cost

191340

175490

15850

Favourable

Controlable margin  

196210

225280

29070

Favourable

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