Exercise 22-16 (Part Level Submission) The Sports Equipment Division of Harringt

Question

Exercise 22-16 (Part Level Submission)

The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2017 at $904,930. The only variable costs budgeted for the division were cost of goods sold ($441,160) and selling and administrative ($62,530). Fixed costs were budgeted at $100,550 for cost of goods sold, $93,740 for selling and administrative, and $74,730 for noncontrollable fixed costs. Actual results for these items were:

Prepare a responsibility report for the Sports Equipment Division for 2017. (List variable costs before fixed costs.)

HARRINGTON COMPANY
Sports Equipment Division
Responsibility Report
2017

Budget

Actual

Difference

Favorable
Unfavorable
Neither Favorable
nor Unfavorable

Sales $883,910 Cost of goods sold        Variable 414,930        Fixed 106,530 Selling and administrative        Variable 60,880        Fixed 72,660 Noncontrollable fixed 94,690

Explanation / Answer

SUPPAN MANUFACTURING COMPANY Home Division Responsibility Report For the year ended december 31, 2014 Budget Actual Difference Sales $ 904,930 $ 883,910 $     21,020 U Less: Variable cost Cost of goods sold $ 441,160 $ 414,930 $     26,230 F Selling and administrative $    62,530 $    60,880 $       1,650 F Total variable cost $ 503,690 $ 475,810 $     27,880 F Contribution margin $ 401,240 $ 408,100 $       6,860 F Less:Controllable direct fixed cost Cost of goods sold $ 100,550 $ 106,530 $       5,980 U Selling and administrative $    93,740 $    72,660 $     21,080 F Total controllable direct fixed cost $ 194,290 $ 179,190 $     15,100 F Controllable margin $ 206,950 $ 228,910 $     21,960 F

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