Problem 22-5A (part level submission) Actual Comparison with Budget (a) SUPPAN M

Question

Problem 22-5A (part level submission)

Actual

Comparison with Budget

(a)

SUPPAN MANUFACTURING COMPANY
Home Division
Responsibility Report
For the Year Ended December 31, 2014

Difference

Budget

Actual

Favorable (F)
Unfavorable (U)
Neither Favorable
nor Unfavorable (N)

LINK TO TEXT

Problem 22-5A (part level submission)

Suppan Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2014, and relevant budget data are as follows.

Actual

Comparison with Budget

Sales $1,400,000 $100,000 favorable Variable cost of goods sold 675,000 55,000 unfavorable Variable selling and administrative expenses 125,000 25,000 unfavorable Controllable fixed cost of goods sold 170,000 On target Controllable fixed selling and administrative expenses 80,000 On target
Average operating assets for the year for the Home Division were $2,000,000 which was also the budgeted amount.

Explanation / Answer

Budget Actual Difference Sales $1,300,000 $1,400,000 $100,000 Favorable Variable cost of goods sold 620,000 675,000 55,000 Unfavorable Variable selling and administrative expenses 100,000 125,000 25,000 Unfavorable Controllable fixed cost of goods sold 170,000 170,000 0 Controllable fixed selling and administrative expenses 80,000 80,000 0

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