As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing Department of Riverbed Company for the month of October. Sales in units Variable expenses Sales commissions Advertising expense Travel expense Free samples given out Total variable RIVERBED COMPANY Clothing Department Budget Report For the Month Ended October 31, 2022 Fixed expenses Rent Sales salaries Office salaries Depreciation-autos (sales staff) Total fixed Total expenses Budget 8.480 $2.544 848 3,816 1,696 8,904 1,590 1.272 848 530 4,240 $13,144 Actual 10,600 $2.756 901 4,346 1.484 9,487 1.590 1.272 848 530 4:240 $13.727 Difference Favorable Unfavorable Neither Favorable nor Unfavorable 2,120 Favorable $212 Unfavorable 53 Unfavorable 530 Unfavorable 212 Favorable 583 Unfavorable -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 $583 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 Riverbed Company for the month of October. Sales in units Variable expenses Sales commissions Advertising expense Travel expense Free samples given out Total variable RIVERBED COMPANY Clothing Department Budget Report For the Month Ended October 31, 2022 Fixed expenses Rent Sales salaries Office salaries Depreciation-autos (sales staff) Total fixed Total expenses Budget 8.480 $2.544 848 3,816 1,696 8,904 1,590 1.272 848 530 4,240 $13,144 Actual 10,600 $2.756 901 4,346 1.484 9,487 1.590 1.272 848 530 4:240 $13.727 Difference Favorable Unfavorable Neither Favorable nor Unfavorable 2,120 Favorable $212 Unfavorable 53 Unfavorable 530 Unfavorable 212 Favorable 583 Unfavorable -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 $583 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.
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
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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 Riverbed
Company for the month of October.
Sales in units
Variable expenses
Sales commissions
Advertising expense
Travel expense
Free samples given out
Total variable:
RIVERBED COMPANY
Clothing Department
Budget Report
For the Month Ended October 31, 2022
Fixed expenses
Rent
Sales salaries
Office salaries
Depreciation-autos (sales staff)
Total fixed
Total expenses
$2.544
848
Budget Actual
8.480 10,600 2,120 Favorable
3.816
1,696
8,904
1.590
1,272
848
530
4,240
$13,144
$2.756
901
4,346
1,484
9,487
1.590
1.272
848
530
4,240
Difference
Favorable
Unfavorable
$13,727
Neither Favorable
nor Unfavorable
$212 Unfavorable
53 Unfavorable
530 Unfavorable
212 Favorable
583 Unfavorable
-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
$583 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.
Transcribed Image Text:Prepare a budget report based on flexible budget data to help Joe. (List variable expenses before fixed expenses)
RIVERBED COMPANY
Selling Expense Flexible Budget Report
Clothing Department
Budget
$
Actual
Difference
Favorable
Unfavorable
Neither Favoral
nor Unfavorab
17
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