The operating budget and actual performance for the six months ended June 30, 20x1, for Kobe Hardware Corporation appear below. E-2

1 . Prepare an operating report that shows budget, actual, and difference.
2. Discuss the results, identifying which differences most likely should be investigated by management.

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Budget Actual Selling Expenses Sales Salaries Expense Sales Supplies Expense Rent Expense, Selling Space Utilities Expense, Selling Space Advertising Expense Depreciation Expense, Selling Fixtures Total Selling Expenses General and Administrative Expenses Office Salaries Expense Office Supplies Expense Rent Expense, Office Space Depreciation Expense, Office Equipment Utilities Expense, Office Space Postage Expense Insurance Expense Miscellaneous Expense Total General and Administrative Expenses Total Operating Expenses $ 90,000 $102,030 2,000 1,642 18,000 18,000 12,000 11,256 15.000 21,986 6,500 6,778 $143,500 $161,692 $ 50,000 $ 47,912 1,000 782 4,000 4,000 3,000 3.251 3,000 3,114 500 626 2,000 2,700 500 481 $ 62,866 $224,558 $ 64,000 $207,500