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. Sales in units Variable expenses Sales commissions Advertising expense Travel expense Free samples given out Total variable Fixed expenses SORIA COMPANY Clothing Department Budget Report For the Month Ended October 31, 2020 Rent Sales salaries Office salaries Depreciation-autos (sales staff) Total fixed Total expenses Budget Actual 7,500 11,000 975 3.600 $1,950 $2,970 $1,020 Unfavorable 1.210 235 Unfavorable 3,850 250 Unfavorable 1,540 340 Unfavorable 9,570 1,845 Unfavorable 1,200 7,725 1.500 1,300 900 600 4,300 $12,025 1,500 1,300 900 Difference Favorable Unfavorable Neither Favorable nor Unfavorable 600 3.500 Favorable -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable 4,300 $13.870 $1,845 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. Prepare a budget report based on flexible budget data to help Joe. (List variable costs before fixed costs.)
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. Sales in units Variable expenses Sales commissions Advertising expense Travel expense Free samples given out Total variable Fixed expenses SORIA COMPANY Clothing Department Budget Report For the Month Ended October 31, 2020 Rent Sales salaries Office salaries Depreciation-autos (sales staff) Total fixed Total expenses Budget Actual 7,500 11,000 975 3.600 $1,950 $2,970 $1,020 Unfavorable 1.210 235 Unfavorable 3,850 250 Unfavorable 1,540 340 Unfavorable 9,570 1,845 Unfavorable 1,200 7,725 1.500 1,300 900 600 4,300 $12,025 1,500 1,300 900 Difference Favorable Unfavorable Neither Favorable nor Unfavorable 600 3.500 Favorable -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable -0- Neither Favorable nor Unfavorable 4,300 $13.870 $1,845 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. Prepare a budget report based on flexible budget data to help Joe. (List variable costs before fixed costs.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Transcribed Image Text:Travel Expense
Free Samples
Total Expenses
Fixed Expenses
Rent
Advertising Expense
Variable Expenses
Sales Salaries
Office Salaries
Total Fixed Expenses
Total Variable Expenses
Depreciation-Sale Staff Autos
Sales Commissions
Sales in Units
$
$
Budget
SORIA COMPANY
Selling Expense Flexible Budget Report
Clothing Department
For the Month Ended October 31, 2020
201
$
$
Actual
$
11.
$
Difference
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
<
>
<
>
>
>
>
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Transcribed Image Text: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.
Sales in units
Variable expenses
Sales commissions
Advertising expense
Travel expense
Free samples given out
Total variable
Fixed expenses
Rent
Sales salaries
Office salaries
Depreciation-autos (sales staff)
Total fixed
SORIA COMPANY
Clothing Department
Budget Report
For the Month Ended October 31, 2020
Total expenses
Budget
7,500
$1,950
975
3,600
1,200
7,725
1,500
1,300
900
600
4,300
$12,025
Actual
11,000
1,210
3,850
1,540
$2,970 $1,020 Unfavorable
9,570
1,500
1,300
900
600
4,300
Difference
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
3,500 Favorable
235 Unfavorable
250 Unfavorable
340 Unfavorable
-0-
1,845 Unfavorable
-0- Neither Favorable nor Unfavorable
Neither Favorable nor Unfavorable
-0- Neither Favorable nor Unfavorable
-0- Neither Favorable nor Unfavorable
-0- Neither Favorable nor Unfavorable
$13,870 $1,845 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.
Prepare a budget report based on flexible budget data to help Joe. (List variable costs before fixed costs.)
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