Solution-Prepare responsibility report for home appliance

Prepare responsibility report for home appliance division

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Reference no: EM133085502

Question - First Fast Pte Ltd operates the Home Appliance Division as a profit center. Operating data for this division for the year ended December 31, 2020, are shown below.

	Budget RM	Difference from Budget RM
Sales	2,500,000	80,000 U
Cost of goods sold
Variable	1,100,000	68,000 U
Controllable fixed	300,000	9,000 F
Selling and administrative
Variable	230,000	7,000 F
Controllable fixed	60,000	3,000 U
Non-controllable fixed costs	70,000	3,900 U

In addition, First Fast Pte Ltd incurs $160,000 of indirect fixed costs that were budgeted at $175,000.

Twenty percent (20%) of these costs are allocated to the Home Appliance Division. None of these costs are controllable by the division manager.

Required -

(a) Prepare a responsibility report for the Home Appliance Division (a profit center) for the year.

(b) Comment on the manager's performance in controlling revenues and costs.

Reference no: EM133085502

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Prepare responsibility report for home appliance division

Reference no: EM133085502

Reference no: EM133085502

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