Question

Clothing Department Budget Report For the Month Ended October 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual 8,100 9.000 900 Favorable Sales in units Variable expenses Sales commissions Advertising pense Travel expense $1,620 910 3.988 1,782 8.100 $2.250 $630 Unfavorable 720 90 Favorable 3.600 288 Favorable 990 792 Favorable 7.560 540 Favorable Free samples given out Total variable Fixed expenses Sales salaries Office salaries Depreciation autos (sales staff) 1.500 1500 -- Neither Favorable nor Unfavorable 1.300 1300 -- Neither Favorable nor Unfavorable 500 500 -- Neither Favorable nor Unfavorable 500 500 -- Neither Favorable nor Unfavorable 3.900 3.900 -- Neither Favorable nor Unfavorable $12000 S11450 S540 Favorable Totalford Total expenses As 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. Jos 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 advics. Prepare a budget report based on flexible budget data to help Joe. List variable costs before fed costs.) SORIA COMPANY Selling Expense Flexible Budget Report Clothing Department For the Month Ended October 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual

Answer 1

	Workings	Budget	Actual	Differences
Sales in units	(q)	9,000	9,000	0	Neither favorable nor unfavorable
Variable costs:
Sales Commission	($1620/ 8100) X 9000	1,800	$    2,250	$          450	Unfavorable
Advertising expense	($810/ 8100) X 9000	900	$        720	$          180	Favorable
Travel expense	($3888/ 8100) X 9000	4,320	$    3,600	$          720	Favorable
Free samples given out	($1782/ 8100) X 9000	1,980	$        990	$          990	Favorable
Total Variable cost		$    9,000	$    7,560	$       1,440	Favorable
Fixed expenses:
Rent		$    1,500	$    1,500	0	Neither favorable nor unfavorable
Sales salaries		$    1,300	$    1,300	0	Neither favorable nor unfavorable
Office salaries		$        600	$        600	0	Neither favorable nor unfavorable
Depreciation - autos (sales staff)		$        500	$        500	0	Neither favorable nor unfavorable
Total Fixed expenses		$    3,900	$    3,900	0	Neither favorable nor unfavorable
Total expense		$ 12,900	$ 11,460	$       1,440	Favorable