a sales manager, Joe Batista was given the following static budget report for se

Question

a 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.
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.

Explanation / Answer

Solution:

Working - Calculation of Variable Expenses -

Suppose Sales commission - ($1,804 / 8200 unit ) * 10,700 units = $ 2,354

Budget Actual Sales in unit 10,700 10,700 Variable Expenses Sales Commission 2,354 2,675 321 U Advertisement expense 1,498 1,177 321 F Travel Expense 4,387 4,280 107 F Free Samples Given out 1,926 1,605 321 F Total Variable cost 10,165 9,737 428 F Fixed Expenses Rent 1,600 1,600 Sales Salaries 1,200 1,200 Office Salaries 700 700 Depreciation 600 600 Total Fixed cost 4,100 4,100 Total Expenses 14,265 13,837 428 F

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.