Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2020, are as shown below. Budget Differencefrom BudgetSales $2,490,200 $48,000FavorableCost of goods sold Variable 1,295,300 37,500Favorable Controllable fixed 197,900 2,500UnfavorableSelling and administrative Variable 211,700 6,800Unfavorable Controllable fixed 50,200 1,800UnfavorableNoncontrollable fixed costs 68,900 4,700UnfavorableIn addition, Clarke incurs $183,100 of indirect fixed costs that were budgeted at $175,500. Twenty percent (20%) of these costs are allocated to the Patio Furniture Division.Prepare a responsibility report for the Patio Furniture Division for the year.

The responsibility report is the budget report, which is prepared to calculate the controllable…

Answered: Prepare a responsibility report for the…

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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Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2020, are as shown below.

	Budget	Difference from Budget
Sales	$2,490,200	$48,000	Favorable
Cost of goods sold
Variable	1,295,300	37,500	Favorable
Controllable fixed	197,900	2,500	Unfavorable
Selling and administrative
Variable	211,700	6,800	Unfavorable
Controllable fixed	50,200	1,800	Unfavorable
Noncontrollable fixed costs	68,900	4,700	Unfavorable

In addition, Clarke incurs $183,100 of indirect fixed costs that were budgeted at $175,500. Twenty percent (20%) of these costs are allocated to the Patio Furniture Division.

Prepare a responsibility report for the Patio Furniture Division for the year.

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