Reference no: EM132558026

You are given the following information for the Face-Care Products Division of Cygnet Inc.:

Cygnet Inc.

Face-Care Products

Budgetary Control Report of January ($ millions)

Details                                                        Budget                                  Actual

Total Face Care Product Market               $10,000                          $12,500

Market share                                         5%                                     4%

Sales revenue                                         $500                             $500

Variable costs

Raw materials                                           $ 80                              $ 95

Direct labour                                             150                                  150

Overhead                                                    50                                   45

Marketing                                                    20                                   $300

                                                                  10                                   $300

Fixed costs

Production                                                   $ 50                                        45

Marketing & administration                                    10                                       60

                                                                           5                                    50

Total costs                                                       $360                                    $350

Operating income                                                $140                                      $150

Required

Question (a) Is the Face-Care Products Division "in control" or "out of control"?

Question (b) In any areas where the division has deviated from the original plan, identify which managers should be held responsible.

Question (c) How much operating income do you think the Face-Care Products Division should have made in January?