This is the third of three Broading Your Perspective problems that make up the C

Question

This is the third of three Broading Your Perspective problems that make up the Comprehensive Project grade. One of the major responsibilities of a manager is to delegate responsibility to lower-level managers and then to assess the performance of these managers. This problem assesses your ability to assess the performance of three managers using budgetary control and responsibility accounting concepts learned in chapters 9 and 10. This problem requires two short essays to be written. The first essay should be at least 150 words in length and enumerate items to include in the responsibility reports for each manager. the first study should be completed in WileyPlus. The second essay (part b) should be at least 500 word discussing the relevant results of your evaluation that need to be brought to the attention of each of the three managers. The paper must be grammatically correct and use proper APA format. Please submit this essay on next page. Although the problem is due by April 25th, it would be advantageous to complete the problem shortly after completing Module 3 while budgetary analysis and responsibility accounting are fresh in mind This topic partially fulfills the requirements of the following course learning outcome: Learning Outcome 3 costing techniques. Perform decision and performance analysis using cost-volume-proft, budgeting and standard

Explanation / Answer

Requirement In the responsibility report of Retail sales department, Revenues and cost itmes should be included. In the responsibility report of Wholesale Sales Department, the only cost items should be included. In the responsibility report of outlet Sales department, Revenues, costs and investment in asset should be included Requirement Retail Sales Department Budget Actual Variance Sales 750000 750000 0 Variable costs Cost of goods sold 150000 192000 -42000 Unfavourable Advertising 100000 100000 0 Sales Salaries 75000 75000 0 Printing 10000 10000 0 Travel 20000 14000 6000 Favourable Total Variable cost 355000 391000 -36000 Unfavourable Contribution Margin 395000 359000 -36000 Unfavourable Fixed costs Rent 50000 40000 10000 Favourable Insurance 5000 5000 0 Depreciation 75000 80000 -5000 Unfavourable Total fixed cost 130000 125000 5000 Favourable Operating profit 265000 234000 -31000 Unfavourable Investment in asset 1000000 1000000 0 All Unfavourable and favourable variance of Revenue and cost items should be called to the attention of manager of Retail sales department. Hence, following results should be called for attention of each manager Cost of goods sold Travel Rent Depreciation Wholesale department Budget Actual Variance Sales 400000 400000 0 Variable costs Cost of goods sold 100000 122000 -22000 Unfavourable Advertising 30000 30000 0 Sales Salaries 15000 15000 0 Printing 20000 20000 0 Travel 30000 21000 9000 Favourable Total Variable cost 195000 208000 -13000 Unfavourable Contribution Margin 205000 192000 -13000 Unfavourable Fixed costs Rent 30000 50000 -20000 Unfavourable Insurance 5000 5000 0 Depreciation 100000 90000 10000 Favourable Total fixed cost 135000 145000 -10000 Unfavourable Operating profit 70000 47000 -23000 Unfavourable Investment in asset 1200000 1200000 0 All Unfavourable and favourable variance cost items should be called to the attention of manager of Wholesale department. Hence, following results should be called for attention of each manager Cost of goods sold Travel Rent Depreciation Outlet Sales Budget Actual Variance Sales 200000 200000 0 Variable costs Cost of goods sold 25000 26500 -1500 Unfavourable Advertising 5000 5000 0 Sales Salaries 3000 3000 0 Printing 5000 5000 0 Travel 2000 1500 500 Favourable Total Variable cost 40000 41000 -1000 Unfavourable Contribution Margin 160000 159000 -1000 Unfavourable Fixed costs Rent 10000 12300 -2300 Unfavourable Insurance 5000 5000 0 Depreciation 40000 56000 -16000 Unfavourable Total fixed cost 55000 73300 -18300 Unfavourable Operating profit 105000 85700 -19300 Unfavourable Investment in asset 800000 800000 0 All Unfavourable and favourable variance of Revenue & cost items should be called to the attention of manager of Outlet sales department in addition to investment in asset made by outlet. Hence, following results should be called for attention of each manager Cost of goods sold Travel Rent Depreciation

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