### SORIA COMPANY**Selling Expense Flexible Budget Report** **Clothing Department** **For the Month Ended October 31, 2017**---#### Budget vs. Actual Comparison**Sales in units:**- **Budget:** 10,000- **Actual:** 10,000---**Variable expenses:**1. **Sales commissions ($0.30):** - **Budget:** $3,000 - **Actual:** $2,600 - **Difference:** $400 Favorable (F)2. **Advertising expense ($0.09):** - **Budget:** $900 - **Actual:** $850 - **Difference:** $50 Favorable (F)3. **Travel expense ($0.45):** - **Budget:** $4,500 - **Actual:** $4,100 - **Difference:** $400 Favorable (F)4. **Free samples ($0.20):** - **Budget:** $2,000 - **Actual:** $1,400 - **Difference:** $600 Favorable (F)- **Total variable expenses ($1.04):** - **Budget:** $10,400 - **Actual:** $8,950 - **Difference:** $1,450 Favorable (F)---**Fixed expenses:**1. **Rent:** - **Budget:** $1,500 - **Actual:** $1,500 - **Difference:** $02. **Sales salaries:** - **Budget:** $1,200 - **Actual:** $1,200 - **Difference:** $03. **Office salaries:** - **Budget:** $800 - **Actual:** $800 - **Difference:** $04. **Depreciation—sale staff autos:** - **Budget:** $500 - **Actual:** $500 - **Difference:** $0- **Total fixed expenses:** - **Budget:** $4,000 - **Actual:** $4,000 - **Difference:** $0---**Total expenses:**- **Budget:** $14,400- **Actual:** $12,950- **Difference:** $1,450 Favorable (F)---** ### Soria Company Clothing Department Budget Report Analysis**Budget Report for October 2017**As the sales manager, Joe Batista was provided with the following static budget report outlining the selling expenses in the Clothing Department of Soria Company for the month of October.#### Report Overview![Budget Report](https://via.placeholder.com/150)**SORIA COMPANY** *Clothing Department* **Budget Report for the Month Ended October 31, 2017**| | Budget | Actual | Difference Favorable (Unfavorable) ||---------|--------|--------|------------------------------------|| **Sales in units** | 8,000 | 10,000 | 2,000 Favorable || **Variable expenses** | | | || Sales commissions | $2,400 | $2,600 | ($200) Unfavorable || Advertising expense | $720 | $850 | ($130) Unfavorable || Travel expense | $3,600 | $4,100 | ($500) Unfavorable || Free samples given out| $1,600 | $1,400 | $200 Favorable || **Total Variable** | $8,320 | $8,950 | ($630) Unfavorable || **Fixed expenses** | | | || Rent | $1,500 | $1,500 | $0 || Sales salaries | $1,200 | $1,200 | $0 || Office salaries | $800 | $800 | $0 || Depreciation—autos (sales staff)| $500 | $500 | $0 || **Total Fixed** | $4,000 | $4,000 | $0 || **Total expenses** | $12,320| $12,950| ($630) Unfavorable |#### Analysis1. **Sales Performance:** The sales units were favorable, exceeding the budget by 2,000 units.2. **Variable Expenses:** - **Sales Commissions** were over budget by $200. - **Advertising Expense** exceeded the budget by $130. - **Travel Expense** went above the budget by $500. - **Free Samples Given Out** were under budget by $200. -

A flexible budget is a budget in which some amounts will increase or decrease based on the change in…

As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing Department of Soria Company for the month of October. SORIA COMPANY Clothing Department Budget Report For the Month Ended October 31, 2017 Difference Favorable Unfavorable Budget Actual 8,000 10,000 2,000 Favorable Sales in units Variable expenses Sales commissions $ 2,400 $ 2,600 $ 200 Unfavorable Advertising expense 720 850 130 Unfavorable Travel expense 3,600 4,100 500 Unfavorable Free samples given out 1,600 1,400 200 Favorable Total variable 8,320 8,950 630 Unfavorable Fixed expenses Rent 1,500 1,500 -0- Sales salaries 1,200 1,200 -0- Office salaries 800 800 -0- Depreciation-autos (sales staff) 500 500 -0- Total fixed 4,000 4,000 -0- Total expenses $12,320 $12,950 $630 Unfavorable As a result of this budget report, Joe was called into the president's office and congratulated on his fine sales performance. He was reprimanded, however, for allowing his costs to get out of control. Joe knew something was wrong with the performance report that he had been given. However, he was not sure what to do, and comes to you for advice.

As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing Department of Soria Company for the month of October. SORIA COMPANY Clothing Department Budget Report For the Month Ended October 31, 2017 Difference Favorable Unfavorable Budget Actual 8,000 10,000 2,000 Favorable Sales in units Variable expenses Sales commissions $ 2,400 $ 2,600 $ 200 Unfavorable Advertising expense 720 850 130 Unfavorable Travel expense 3,600 4,100 500 Unfavorable Free samples given out 1,600 1,400 200 Favorable Total variable 8,320 8,950 630 Unfavorable Fixed expenses Rent 1,500 1,500 -0- Sales salaries 1,200 1,200 -0- Office salaries 800 800 -0- Depreciation-autos (sales staff) 500 500 -0- Total fixed 4,000 4,000 -0- Total expenses $12,320 $12,950 $630 Unfavorable As a result of this budget report, Joe was called into the president's office and congratulated on his fine sales performance. He was reprimanded, however, for allowing his costs to get out of control. Joe knew something was wrong with the performance report that he had been given. However, he was not sure what to do, and comes to you for advice.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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