wileyPLUS Weygandt, Managerial Accounting, 7e MANAGEMENT ACCOUNTING (ACCT 2120)

Question

wileyPLUS Weygandt, Managerial Accounting, 7e MANAGEMENT ACCOUNTING (ACCT 2120) Gradebook ORION Downloadable eTextbook VERSDON Problem 10-SA (Part Level Submission) Optimus 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, 2017, and relevant budget data are as follows. ActualComparison with Budget 1,401,000 $101,000 favorable Sales Variable cost of goods sold Variable selling and administrative expenses Controllable fixed cost of goods sold Controllable fixed selling and administrative expenses 675,000 124,000 55,000 unfavorable 25,000 unfavorable 0,000 On target 1,000 On target Average operating assets for the year for the Home Division were $2,001,000 which was also the budgeted amount for the Home Division. (List varlable costs before fixed costs, Round ROI to 1 decimal place, e.a. 1.5) For the Year Ended December 31, 2017 Favorable

Explanation / Answer

Ans. OPTIMUS COMPANY Home Division Responsibility Report for the year ended Dec. 31, 2017 Particulars Budget Actual Difference Sales 1300000 1401000 101000 F Less: Variable costs: Cost of goods sold 620000 675000 55000 U Selling and administration costs 99000 124000 25000 U Total variable cost 719000 799000 80000 U Contribution margin 581000 602000 21000 F Less: Fixed cost: Cost of goods sold 170000 170000 0 no effect Selling and administration costs 81000 81000 0 no effect Total Fixed costs 251000 251000 0 no effect Net opeating income 330000 351000 21000 F ROI (Net income/Average operating assets*100) 16.5 17.5 1.0 F *Increase in Sales , contribution, Operating income & ROI from budgeted to actual   =   Favorable *Decrease in Sales , contribution, Operating income & ROI from budgeted to actual   =   Unfavorable *Increase in Variable costs & Fixed cost from budgeted to actual = Unfavorable *Decrease in Variable costs & Fixed cost from budgeted to actual = Favorable

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