Prepare budget report based on flexible budget data

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Reference no: EM131751305

Problem - As a sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing Department of Soria Company for the month of October

SORIA COMPANY Clothing Department Budget Report  For the Month Ended October 31, 2017

 

Budget

Actual

Difference- Favorable, Unfavorable, Neither Favorable and nor unfavorable

Sales in units

8,100

9,000

900 Favorable

Variable expenses

 

 

 

Sales commissions

$1,620

$2,250

$630 Unfavorable

Advertising expense

810

720

90 Favorable

Travel expense

3,888

3,600

288 Favorable

Free samples given out

1,782

990

792 Favorable

Total variable

8,100

7,560

540 Favorable

Fixed expenses

 

 

 

Rent

1,500

1,500

-0- Neither Favorable nor Unfavorable

Sales salaries

1,300

1,300

-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

3,900

3,900

-0- Neither Favorable nor Unfavorable

Total expenses

$12,000

$11,460

$540 Favorable

As a result of this budget report, Joe was called into the president's office and congratulated on his fine sales performance. He was reprimanded, however, for allowing his costs to get out of control. Joe knew something was wrong with the performance report that he had been given. However, he was not sure what to do, and comes to you for advice.

Required - Prepare a budget report based on flexible budget data to help Joe.

Reference no: EM131751305

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