Question

Problem 10-4A a (Video)

Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2020, are as shown below.

		Budget		Difference from Budget
Sales		$2,500,300		$47,000	Favorable
Cost of goods sold
Variable		1,305,500		44,500	Favorable
Controllable fixed		201,100		4,000	Unfavorable
Selling and administrative
Variable		213,000		7,700	Unfavorable
Controllable fixed		53,100		1,400	Unfavorable
Noncontrollable fixed costs		69,300		3,400	Unfavorable

In addition, Clarke incurs $178,500 of indirect fixed costs that were budgeted at $175,300. Twenty percent (20%) of these costs are allocated to the Patio Furniture Division.

Prepare a responsibility report for the Patio Furniture Division for the year. (List variable costs before fixed costs.)

CLARKE INC. Patio Furniture Division Responsibility Report For the Year Ended December 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual S Click if you would like to show Work for this question: Open Show Work

Answer 1

CLARKE INC.

PATIO FURNITURE DIVISION

RESPONSIBILITY REPORT

FOR THE YEAR ENDED DECEMBER 31,2020

Particulars Budget Actual Difference Favorable or Unfavorable Sales (A) $2,500,300 $2,547,300 $47,000 Favorable Variable costs Cost of goods sold Selling and administrative Total Variable costs (B) $1,305,500 $213,000 $1,518,500 $1,261,000 $220,700 $1,481,700 $44,500 Favorable $7,700 Unfavorable $36,800 Favorable Contribution Margin (A-B) $981,800 $1,065,600 $83,800 Favorable Controllable fixed costs Cost of goods sold Selling and administrative Total Controllable fixed costs (C) $201,100 $53,100 $254,200 $205,100 $54,500 $259,600 $4,000 Unfavorable $1,400 Unfavorable $5,400 Unfavorable Controllable Margin (A-B-C) $727,600 $806,000 $78,400 Favorable

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