The Sports Equipment Division of Harrington Company is operated as a profit cent

Question

The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2017 at $900,830. The only variable costs budgeted for the division were cost of goods sold ($444,600) and selling and administrative ($63,110). Fixed costs were budgeted at $100,660 for cost of goods sold, $91,560 for selling and administrative, and $71,770 for noncontrollable fixed costs. Actual results for these items were: Sales $886,080 Cost of goods sold Variable 415,130 107,050 Fixed Selling and administrative 65,890 70,660 94,140 Variable Fixed Noncontrollable fixed

Explanation / Answer

HARRINGTON COMPANY

Sports Equipment Division

Responsibility Report

2017

For sales Favourable is when actual exceeds the budget.

For sales Unavourable is when budget is greater than actual.

For variable and fixed costs Favourable is when budget is greater than actual.

For variable and fixed costs Unavourable is when actual exceeds the budget.

Budget Actual Difference Sales 900,830 886,080 Unfavourable Variable costs : Cost of goods sold 444,600 415,130 Favourable Selling and administrative 63,110 65,890 Unfavourable Fixed costs : Cost of goods sold 100,660 107,050 Unfavourable Selling and administrative 91,560 70,660 Unfavourable Non controllable fixed 71,770 94,140 Unfavourable

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