Horatio Inc. has three divisions which are operated as profit centers. Actual op

Question

Horatio Inc. has three divisions which are operated as profit centers. Actual operating data for the divisions listed alphabetically are as follows.

Operating Data

Women’s Shoes

Men’s Shoes

Children’s Shoes

$304,020

$202,680

112,600

101,340

106,970

675,600

506,700

281,500

HORATIO INC.
Women’s Shoe Division
Responsibility Report
For the Month Ended June 30, 2017

Difference

Budget

Actual

Favorable/
Unfavorable/
Neither Favorable
nor Unfavorable

Horatio Inc. has three divisions which are operated as profit centers. Actual operating data for the divisions listed alphabetically are as follows.

Explanation / Answer

Missing amounts are as computed below:

Responsibility report for the Women’s Shoes Division assuming (1) the data are for the month ended June 30, 2017, and (2) all data equal budget except variable costs which are $5,630 over budget.

Operating Data Women’s Shoes Men’s Shoes Children’s Shoes Sales 675,600 506,700 484,180 Variable costs 371,580 360,320 281,500 Contribution margin 304,020 146,380 202,680 Controllable fixed costs 112,600 45,040 95,710 Controllable margin 191,420 101,340 106,970

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