Using responsibility reports to evaluate cost, revenue, and profit centersThe accountant for a subunit of Speed Sports Company went on vacation before completing the subunit’s monthly responsibility report. This is as far as she got:RequirementsComplete the responsibility report for this subunit.Based on the data presented, what type of responsibility center is this Subunit.Which items should be investigated if part of management’s decision criteria is to investigate all variances exceeding $12,000? Speed-Subunit XRevenLe by ProductDownhill-RIFlexible BudgetActualResultsFlexibleBudgetSales VolumeVarianceStaticBudgetVariance(a)$ 321,000151,000$ 17,000 F(d)(b)$ 295,000145,000Downh Il-RII()$ 161,000285,000$ 3,000 U288,000(e)303,000Cross-EXICross-EXII259,000(1)255,00016,500 U271,500425,0002,000 F(h)404,000Snow-LXITotal(g)$ 1,441,000(k)$ 1,418,500

1) Actual expense result < flexible budget expense; variance = Favourable (F) Actual expense…

Answered: Speed-Subunit X RevenLe by Product…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Using responsibility reports to evaluate cost, revenue, and profit centers

The accountant for a subunit of Speed Sports Company went on vacation before completing the subunit’s monthly responsibility report. This is as far as she got:

Requirements

Complete the responsibility report for this subunit.
Based on the data presented, what type of responsibility center is this Subunit.
Which items should be investigated if part of management’s decision criteria is to investigate all variances exceeding $12,000?

Speed-Subunit X
RevenLe by Product
Downhill-RI
Flexible Budget
Actual
Results
Flexible
Budget
Sales Volume
Variance
Static
Budget
Variance
(a)
$ 321,000
151,000
$ 17,000 F
(d)
(b)
$ 295,000
145,000
Downh Il-RII
()
$ 161,000
285,000
$ 3,000 U
288,000
(e)
303,000
Cross-EXI
Cross-EXII
259,000
(1)
255,000
16,500 U
271,500
425,000
2,000 F
(h)
404,000
Snow-LXI
Total
(g)
$ 1,441,000
(k)
$ 1,418,500

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