Do It! Review 24-3 Your answer is partially correct. Try again. The Rockies Divi

Question

Do It! Review 24-3 Your answer is partially correct. Try again. The Rockies Division operates as a profit center. It reports the following for the year, Budgeted Actual Sales Variable costs Controllable fixed costs Noncontrollable fixed costs $1,996,900 $1,840,900 746,100 550,100 259,700 809,700 550,100 259,700 Prepare a responsibility report for the Rockies Division at December 31, 2017 ROCKTES DIVISION Responsibility Report For the Year Ended December 31, 2017 Favorable Unfavorable Neither Favorable 1,996,900 809,700 1187200 550,100 259,700 1,840,900 746,100 1094800 550,100 259,700 Sales 156,000Unfavorable 63,600 Favorable 92400 Unfavorable Variable Costs Contribution Margin Controllable Fixed Costs 0 | I' Neither Favorable nor Unfavorable Controllable Margin 011 I, Neither Favorable nor Unfavorable

Explanation / Answer

Hey there,

You have solved the question almost correctly :) but there is only one mistake that you have made !

Just read the question again and see what is asked ?

In the question it is asked what is the controllable margin.

Controllable Margin =Contribution Margin - Controllable Fixed Costs

but instead of calculating controllable margin , you have written the Uncontrollable fixed costs.

So, have a look at the table below and you can correct your answer...

I hope the solution is now clear to you....do let me know if you have any other queries...

All the best :)

Difference Pariculars Budgeted ($) Actual ($) Amount Favourable/ Unfavourable Sales 19,96,900 18,40,900 156000 Unfavourable Variable Cost 809700 746100 63600 Favourable Contribution Margin 1187200 1094800 92400 Unfavourable Controllable Fixed Costs 550100 550100 0 Neither Favourable nor unfav Controllable Margin 637100 544700

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