As sales manager, Hank Short was given the following static budget report for selling expenses in the Winter Sports Department of Jennings Outdoor Company for the month of November. Jennings Outdoor Company Winter Sports Department Budget Report For the Month Ended November 30, 2020 Difference Favorable F Unfavorable U Budget 4,000 Actual 4.400 400 F Sales in units Variable expenses Sales commissions Advertising expense Travel expense Demonstration models given out Total variable Fixed expenses Rent Sales salaries Office salaries Depreciation - vans (sales staff) Total fixed Total expenses $120,000 $124.400 40,000 42.500 168,000 178.500 108,000 97,100 436,000 442.500 $4400 U 2.500 U 10,500U 10.900 F 6.500 0 7.300 7.300 59.700 59,700 39,800 39.800 2.300 2.800 109,100 109,600 $545,100 $552,100 500 U 500 U $7.000 U 'The increase in depreciation was due to a new vehicle that had to be purchased as a result of an accident driving on snowy roads on the way to visit a customer. As a result of this budget report, Hank 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. Hankknew 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. Your answer is correct. Prepare a budget report based on flexible budget data to help Hank. (Round per unit answers to 2 decimal places, eg. 15.25.) Jennings Outdoor Company Winter Sports Department Flexible Budget Report For the Month Ended November 30, 2020 Difference Favorable Unfavorable Jennings Outdoor Company Winter Sports Department Flexible Budget Report For the Month Ended November 30, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Per Unit Budget Actual Sales in Units 5 4,400 4400 Variable Expenses Sales Commissions 132000 124400 Advertising Expense 44,000 42500 Travel Expense 30.00 10.00 42.00 27.00 109.00 184800 178500 7600 1500 6300 21700 37100 Favorable Favorable Favorable Favorable Favorable 118800 97100 Free Demonstration Models Total Variable C 479600 442500 Fixed Expenses 7300 Rent Sales Salaries 7300 59700 59700 39800 Office Salaries Depreciation - Auto (Sales Staff) : Total Fixed 39800 2300 o o 0 500 i 500 36600 i Neither Favorable nor Unfavorable Neither Favorable nor Unfavorable Neither Favorable nor Unfavorable 4 Unfavorable Unfavorable Favorable 109100 2800 109600 552100 Total Expenses 588700 $ e Textbook and Media Your answer is correct. Should Hank have been reprimanded? Explain. Hank should not be reprimanded as Hank managed the expenses in his department e Textbook and Media Attempts: 2 of 3 use After Hank because familiar with the flexible budget report, he began to analyze the numbers. Hank feels that sales can be increased if Jennings Outdoor Company would increase sales commissions to $31.00 per unit. This would allow them to reduce advertising expense to $8.00 per unit. Hankthinks that these changes will motivate the sales staff to sell at least 5,600 units. He is allowed to try his plan in December and had the following results. Jennings Outdoor Company Winter Sports Department Results For the Month Ended December 31, 2020 Sales in units 5,600 Variable expenses Sales commissions $167,100 Advertising expense 42,900 Travel expense 227,900 Demonstration models given out 129,600 Total variable 567,500 Fixed expenses Rent 7,300 Sales salaries 59,700 Office salaries 39,800 Depreciation - vans (sales staff) 2,800 Total fixed 109,600 Total expenses $677,100 Prepare a budget report based on flexible budget data. The new depreciation amount has been included in the budgeted fixed costs. (Round per unit answers to 2 decimal places, eg. 15.25.) Jennings Outdoor Company Winter Sports Department Flexible Budget Report d() 129,600 567,500 Demonstration models given out Total variable Fixed expenses Rent Sales salaries Office salaries Depreciation - vans (sales staff) Total fixed Total expenses 7,300 59,700 39,800 2,800 109,600 $677,100 Prepare a budget report based on flexible budget data. The new depreciation amount has been included in the budgeted fixed costs. (Round per unlt answers to 2 decimal places, eg. 15.25.) Jennings Outdoor Company Winter Sports Department Flexible Budget Report Difference Favorable Unfavorable Neither Favorable nor Unfavorable Per Unit Budget Actual Do you think the new planis valid? Explain. It appears that the new plan is a as favorable total variance is by $ than in November. As sales manager, Hank Short was given the following static budget report for selling expenses in the Winter Sports Department of Jennings Outdoor Company for the month of November. Jennings Outdoor Company Winter Sports Department Budget Report For the Month Ended November 30, 2020 Difference Favorable F Unfavorable U Budget 4,000 Actual 4.400 400 F Sales in units Variable expenses Sales commissions Advertising expense Travel expense Demonstration models given out Total variable Fixed expenses Rent Sales salaries Office salaries Depreciation - vans (sales staff) Total fixed Total expenses $120,000 $124.400 40,000 42.500 168,000 178.500 108,000 97,100 436,000 442.500 $4400 U 2.500 U 10,500U 10.900 F 6.500 0 7.300 7.300 59.700 59,700 39,800 39.800 2.300 2.800 109,100 109,600 $545,100 $552,100 500 U 500 U $7.000 U 'The increase in depreciation was due to a new vehicle that had to be purchased as a result of an accident driving on snowy roads on the way to visit a customer. As a result of this budget report, Hank 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. Hankknew 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. Your answer is correct. Prepare a budget report based on flexible budget data to help Hank. (Round per unit answers to 2 decimal places, eg. 15.25.) Jennings Outdoor Company Winter Sports Department Flexible Budget Report For the Month Ended November 30, 2020 Difference Favorable Unfavorable Jennings Outdoor Company Winter Sports Department Flexible Budget Report For the Month Ended November 30, 2020 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Per Unit Budget Actual Sales in Units 5 4,400 4400 Variable Expenses Sales Commissions 132000 124400 Advertising Expense 44,000 42500 Travel Expense 30.00 10.00 42.00 27.00 109.00 184800 178500 7600 1500 6300 21700 37100 Favorable Favorable Favorable Favorable Favorable 118800 97100 Free Demonstration Models Total Variable C 479600 442500 Fixed Expenses 7300 Rent Sales Salaries 7300 59700 59700 39800 Office Salaries Depreciation - Auto (Sales Staff) : Total Fixed 39800 2300 o o 0 500 i 500 36600 i Neither Favorable nor Unfavorable Neither Favorable nor Unfavorable Neither Favorable nor Unfavorable 4 Unfavorable Unfavorable Favorable 109100 2800 109600 552100 Total Expenses 588700 $ e Textbook and Media Your answer is correct. Should Hank have been reprimanded? Explain. Hank should not be reprimanded as Hank managed the expenses in his department e Textbook and Media Attempts: 2 of 3 use After Hank because familiar with the flexible budget report, he began to analyze the numbers. Hank feels that sales can be increased if Jennings Outdoor Company would increase sales commissions to $31.00 per unit. This would allow them to reduce advertising expense to $8.00 per unit. Hankthinks that these changes will motivate the sales staff to sell at least 5,600 units. He is allowed to try his plan in December and had the following results. Jennings Outdoor Company Winter Sports Department Results For the Month Ended December 31, 2020 Sales in units 5,600 Variable expenses Sales commissions $167,100 Advertising expense 42,900 Travel expense 227,900 Demonstration models given out 129,600 Total variable 567,500 Fixed expenses Rent 7,300 Sales salaries 59,700 Office salaries 39,800 Depreciation - vans (sales staff) 2,800 Total fixed 109,600 Total expenses $677,100 Prepare a budget report based on flexible budget data. The new depreciation amount has been included in the budgeted fixed costs. (Round per unit answers to 2 decimal places, eg. 15.25.) Jennings Outdoor Company Winter Sports Department Flexible Budget Report d() 129,600 567,500 Demonstration models given out Total variable Fixed expenses Rent Sales salaries Office salaries Depreciation - vans (sales staff) Total fixed Total expenses 7,300 59,700 39,800 2,800 109,600 $677,100 Prepare a budget report based on flexible budget data. The new depreciation amount has been included in the budgeted fixed costs. (Round per unlt answers to 2 decimal places, eg. 15.25.) Jennings Outdoor Company Winter Sports Department Flexible Budget Report Difference Favorable Unfavorable Neither Favorable nor Unfavorable Per Unit Budget Actual Do you think the new planis valid? Explain. It appears that the new plan is a as favorable total variance is by $ than in November