Question

Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2020, and relevant budget data are as follows. Actual Comparison with Budget $1,400,000 $101,000 favorable Sales Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative expenses 680,000 55,000 unfavorable 124,000 24,000 unfavorable 169,000 On target 79,000 On target Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted amount. OPTIMUS COMPANY Home Division Responsibility Report For the Year Ended December 31, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual ROI

Answer 1

ActualComparison with BudgetSales$1,399,600$100,450 favorableVariable cost of goods sold674,72054,360 unfavorableVariable selling and administrative expenses125,43024,060 unfavorableControllable fixed cost of goods sold170,050On targetControllable fixed selling and administrative expenses79,940On target