As sales manager, Joe Batista was given the following static budget report for s

Question

As sales manager, Joe Batista was given the following static budget report for selling expenses in the Soothing 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 hn 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

SORIA COMPANY Selling Expense Flexible Budget Report Clothing Department For the Month ended October 31, 2017 Budget Actual Difference Sales in Units 10,000 10,000 0 None Variable Expenses Sales Commission 2,400 2,600 -200 Unfavorable Advertising expenses 1,300 800 500 Favaorable Travel expenses 4,600 4,000 600 Favaorable Free samples given 2,000 1,200 800 Favaorable Total Variable 10,300 8,600 1,700 Favaorable Fixed Expenses Rent 1,700 1,700 0 None Sales salaries 1,300 1,300 0 None Office salaries 600 600 0 None Depreciation - auto 500 500 0 None Total Fixed 4,100 4,100 0 None Total Expense 14,400 12,700 1,700 Favaorable

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