Question

For the year ending December 31, 2017, Flounder Company accumulates the following data for the Plastics Division which it operates as an investment center contribution margin-$704,000 budget, $718,900 actual controllable fixed costs $274,000 budget. $276,000 actual. Average operating assets for the year were $2,150,000. Prepare a responsibility report for the Plastics Division beginning with contribution margin (Round ROI to 1 decimal place, s. 15) FLOUNDER COMPANY Plastics Division Responsibility Report For the Year Ended December 31, 2017 : Difference Favorable/Unfavorable Neither Favorable nor Unfavorable Budget Actual Contribution Margin Favorable Controllable Fixed Costs Unfavorable Controllable Margin Favorable Seturn on investment vorable

Answer 1

Answer) S.no Particulars 1 Contribution margin 2 Controllable fixed cost 3 Controllable Margin (1-2) 4 operating assets 5 Return on investment(3/4* Budegeted 7,04,000.00 2,74,000.00 4,30,000.00 21,50,000.00 20% Actual 7,18,900.00 2,76,000.00 4,42,900.00 21,50,000.00 20.6% Difference status 14900 Favorable -2000 Un favorable 12900 Favorable 0.60% Favorable Favorable: it means the budgeted is less than the actual income then the condition shows organisation favorable. Where as cost wise the actual is less than budgeted the condition also favorable in nature. Un favorable: it means budgeted income greater than actual that condition shows favorable where as the budgetd cost is less than tha actual then it shows un favorable in nature