Question

The Real Estate Products Division of McKenzie Co. is operated as a profit center. Sales for the division were budgeted for 2019 at $1,250,000. The only variable costs budgeted for the division were cost of goods sold ($610,000) and selling and administrative ($80,000). Fixed costs were budgeted at $130,000 for cost of goods sold, $120,000 for selling and administrative and $95,000 for noncontrollable fixed costs. Actual results for these items were:

Answer 1

Answer:

Requirement: Prepare a responsibility report for the Real Estate Products Division of McKenzie Co for 2019.

Note: See missing word attached as picture below

                            Responsibility report 2019

                                              Budget          Actual         Difference

Sales                                 $1,250,000    $1,175,000     75000 U

Variable costs

     Cost of goods sold       610,000        545,000         65000 F

      Selling & Admin            80,000         82,000           2000 U

       Total                           $690,000     $627,000        63000 F

Contribution Margin        $560,000     $548,000        12000 U

Controllable fixed cost

     Cost of goods sold        130,000         140,000         10000 U

      Selling & Admin            120,000         100,000         20000 F

       Total                           $250,000       $240,000       10000 F

Controllable Margin         $310,000       $308,000       2000U