Question

Sarasota Company Clothing Department Budget Report For the Month Ended October 31, 2017
					Difference
	Budget		Actual		Favorable Unfavorable Neither Favorable nor Unfavorable
Sales in units	8,500		10,000		1,500	Favorable
Variable expenses
Sales commissions	$2,380		$2,600		$220	Unfavorable
Advertising expense	850		900		50	Unfavorable
Travel expense	3,910		3,500		410	Favorable
Free samples given out	1,615		1,100		515	Favorable
Total variable	8,755		8,100		655	Favorable
Fixed expenses
Rent	1,700		1,700		–0–	Neither Favorable nor Unfavorable
Sales salaries	1,000		1,000		–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	3,800		3,800		–0–	Neither Favorable nor Unfavorable
Total expenses	$12,555		$11,900		$655	Favorable

Prepare a budget report based on flexible budget data to help Joe. (List variable costs before fixed costs.)

Sarasota Company Selling Expense Flexible Budget Report Clothing Department For the Quarter Ended October 31, 2017For the Year Ended October 31, 2017For the Month Ended October 31, 2017
						Difference
		Budget		Actual		Favorable Unfavorable Neither Favorable nor Unfavorable
Office SalariesDepreciation—Sale Staff AutosSales in UnitsFixed ExpensesTotal Variable ExpensesRentFree SamplesVariable ExpensesSales SalariesSales CommissionsAdvertising ExpenseTotal ExpensesTravel ExpenseTotal Fixed Expenses
Variable ExpensesTotal Fixed ExpensesRentTravel ExpenseTotal Variable ExpensesFixed ExpensesFree SamplesAdvertising ExpenseOffice SalariesDepreciation—Sale Staff AutosSales CommissionsSales in UnitsTotal ExpensesSales Salaries
Depreciation—Sale Staff AutosSales in UnitsSales SalariesOffice SalariesFixed ExpensesRentFree SamplesSales CommissionsTotal ExpensesAdvertising ExpenseTotal Fixed ExpensesTotal Variable ExpensesTravel ExpenseVariable Expenses		$		$		$	FavorableNeither Favorable nor UnfavorableUnfavorable
Total Fixed ExpensesSales SalariesDepreciation—Sale Staff AutosFixed ExpensesSales in UnitsOffice SalariesFree SamplesRentSales CommissionsTotal ExpensesTotal Variable ExpensesTravel ExpenseVariable ExpensesAdvertising Expense							Neither Favorable nor UnfavorableUnfavorableFavorable
Sales in UnitsTotal Fixed ExpensesSales SalariesTravel ExpenseVariable ExpensesFree SamplesTotal ExpensesDepreciation—Sale Staff AutosFixed ExpensesSales CommissionsTotal Variable ExpensesAdvertising ExpenseOffice SalariesRent							UnfavorableNeither Favorable nor UnfavorableFavorable
Fixed ExpensesTotal Variable ExpensesTravel ExpenseVariable ExpensesFree SamplesAdvertising ExpenseDepreciation—Sale Staff AutosTotal ExpensesTotal Fixed ExpensesOffice SalariesSales CommissionsRentSales in UnitsSales Salaries							UnfavorableFavorableNeither Favorable nor Unfavorable
Office SalariesSales CommissionsTravel ExpenseTotal ExpensesTotal Fixed ExpensesAdvertising ExpenseVariable ExpensesTotal Variable ExpensesDepreciation—Sale Staff AutosFixed ExpensesFree SamplesSales in UnitsRentSales Salaries							Neither Favorable nor UnfavorableUnfavorableFavorable
Sales in UnitsTotal ExpensesRentFixed ExpensesFree SamplesTravel ExpenseSales SalariesSales CommissionsAdvertising ExpenseDepreciation—Sale Staff AutosVariable ExpensesOffice SalariesTotal Variable ExpensesTotal Fixed Expenses
Office SalariesTravel ExpenseVariable ExpensesAdvertising ExpenseRentFixed ExpensesSales CommissionsSales in UnitsTotal Fixed ExpensesTotal Variable ExpensesDepreciation—Sale Staff AutosFree SamplesSales SalariesTotal Expenses							UnfavorableFavorableNeither Favorable nor Unfavorable
Office SalariesSales CommissionsVariable ExpensesFixed ExpensesRentFree SamplesTotal Variable ExpensesSales in UnitsSales SalariesAdvertising ExpenseTotal ExpensesDepreciation—Sale Staff AutosTravel ExpenseTotal Fixed Expenses							UnfavorableFavorableNeither Favorable nor Unfavorable
Total Fixed ExpensesFixed ExpensesFree SamplesTotal ExpensesDepreciation—Sale Staff AutosRentOffice SalariesTotal Variable ExpensesTravel ExpenseVariable ExpensesSales CommissionsAdvertising ExpenseSales SalariesSales in Units							Neither Favorable nor UnfavorableUnfavorableFavorable
Sales CommissionsTotal Fixed ExpensesSales in UnitsSales SalariesFixed ExpensesTotal ExpensesDepreciation—Sale Staff AutosFree SamplesTotal Variable ExpensesOffice SalariesTravel ExpenseRentVariable ExpensesAdvertising Expense							UnfavorableNeither Favorable nor UnfavorableFavorable
Total Fixed ExpensesAdvertising ExpenseSales CommissionsTotal ExpensesTotal Variable ExpensesOffice SalariesRentTravel ExpenseVariable ExpensesFree SamplesSales SalariesDepreciation—Sale Staff AutosFixed ExpensesSales in Units							FavorableUnfavorableNeither Favorable nor Unfavorable
Total Variable ExpensesRentTravel ExpenseVariable ExpensesDepreciation—Sale Staff AutosAdvertising ExpenseFixed ExpensesFree SamplesSales in UnitsOffice SalariesSales CommissionsTotal ExpensesSales SalariesTotal Fixed Expenses		$		$		$	FavorableNeither Favorable nor UnfavorableUnfavorable

Answer 1

Sarasota Company
Selling Expense Flexible Budget Report
Clothing Department
For the Month Ended October 31, 2017
	Budget	Actual	Difference
Sales in units	10000	10000
Variable expenses
Sales commissions	2800	2600	200	Favorable
Advertising expense	1000	900	100	Favorable
Travel expense	4600	3500	1100	Favorable
Free samples	1900	1100	800	Favorable
Total variable expenses	10300	8100	2200	Favorable
Fixed expenses
Rent	1700	1700	0	Neither Favorable nor Unfavorable
Sales salaries	1000	1000	0	Neither Favorable nor Unfavorable
Office salaries	600	600	0	Neither Favorable nor Unfavorable
Depreciation—sale staff autos	500	500	0	Neither Favorable nor Unfavorable
Total fixed expenses	3800	3800	0	Neither Favorable nor Unfavorable
Total expenses	14100	11900	2200	Favorable
Workings:
	Budget
Variable expenses
Sales commissions	2800	=2380/8500*10000
Advertising expense	1000	=850/8500*10000
Travel expense	4600	=3910/8500*10000
Free samples	1900	=1615/8500*10000