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
Budget Report
For the Month Ended October 31, 2017
Budget Actual Difference
Favorable
Unfavorable
Neither Favorable nor Unfavorable
Sales in units 7,680 9,600 1,920 Favorable
Variable expenses
Sales commissions $2304 $2,496 $192 Unfavorable
Advertising expenses 768 816 48 Unfavorable
Travel expense 3,456 4936 480 Unfavorable
Free samples given out 1,536 1,344 192 Favorable
Total variable 8064 8,592 528 Unfavorable
Fixed expenses
Rent 1,440 1,440 -0- Neither Favorable nor Unfavorable
Sales salaries 1,152 1,152 -0- Neither Favorable nor Unfavorable
Office salaries 768 768 -0- Neither Favorable nor Unfavorable
Depreciation-autos (sales staff) 480 480 -0- Neither Favorable nor Unfavorable
Total Fixed 3840 3840 -0- Neither Favorable nor Unfavorable
Total expenses $11,904 $12,432 $528 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
Favorable /Unfavorable /Neither Favorable nor Unfavorable
Budget Actual
