Answer:
Missing Information in Question:
As 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 Difference Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable Sales in units 7,700 11,000 3,300 Favorable Variable expenses Sales commissions $1,848 $2,640 $792 Unfavorable Advertising expense 924 990 66 Unfavorable Travel expense 3,542 4,400 858 Unfavorable Free samples given out 1,848 1,210 638 Favorable Total variable 8,162 9,240 1,078 Unfavorable Fixed expenses Rent 1,400 1,400 –0– Neither Favorable nor Unfavorable Sales salaries 1,000 1,000 –0– Neither Favorable nor Unfavorable Office salaries 900 900 –0– Neither Favorable nor Unfavorable Depreciation—autos (sales staff) 400 400 –0– Neither Favorable nor Unfavorable Total fixed 3,700 3,700 –0– Neither Favorable nor Unfavorable Total expenses $11,862 $12,940 $1,078 Unfavorable 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. Prepare a budget report based on flexible budget data to help Joe. (List variable costs before fixed costs. Do not leave any answer field blank. Enter 0 for amounts.) SORIA COMPANY Selling Expense Flexible Budget Report Clothing Department For the Month Ended October 31, 2017 Difference Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $
Explanation:
As per the given information, the budget report can be listed as;
Budget Actual Difference
Sales in units 11000 11000 0
Variable Costs:
Sales commissions ($1716/7800 x11000) 2420 2640 220
Advertising expense ($780/7800 x11000) 1100 1100 0
Travel expense $3744/7800 x 11000) 5280 4950 330
Free samples given out ($1482/7800 x11000) 2090 1210 880
Total Variable Costs 10890 9900 990
Fixed Costs:
Rent 1700 1700 0
Sales salaries 1400 1400 0
Office salaries 900 900 0
Depreciation-autos (sales staff) 600 600 0
Total Fixed Costs 4600 4600 0
Total Costs 15490 14500 990
