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5. Brown Co. sells the following products: Sporting Goods, Clothing and furniture. The performance report for the sales manager of the Sporting Goods Dept. appears
5. Brown Co. sells the following products: Sporting Goods, Clothing and furniture. The performance report for the sales manager of the Sporting Goods Dept. appears below: Performance Report Sales $4,000 Cost Of Goods Sold (actual) 2.180 Gross Profit 1,820 Other Expenses: Advertising Expense 110 Salaries Expense 1,240 Depreciation Expense 270 General & Administrative Expenses 250 1.870 Profit (Loss) (50) Additional Information: (1) Because of efficiencies associated with production methods, actual cost of goods sold was $70 lower than budgeted. (2) Salaries Expense (above) reflects, in part, allocated salaries of employees whose work takes them into several depts. Assignment of allocated salaries ($ 320) to the depts. was based on relative sales dollars (below): Sp. Goods Clothing Furniture Sales $4,000 $4,000 $2,000 (3) Depreciation charges consisted of the following: (a) 40% of total: depreciation of office furniture within the Sp. Goods Dept. (b) 60% of total: depreciation on bldg. in which all the firm's activities take place (4) All general and administrative expenses were allocated costs. (5) The cost of general advertising (ie, advertising for the overall company) of $35 was reflected in the above performance report. Required: Revise the performance report of the Sporting Goods Dept. to reflect the principle of controllability
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