As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing Department of Soria Company for the month of October.

As a result of this budget report, Joe was called into the presidents office and congratulated on his fine sales performance. He was reprimanded, however, for allowing his costs to get out of control. Joe knew 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. Prepare a budget report based on flexible budget data to help Joe.

SORIA COMPANY Clothing Department Budget Report For the Month Ended October 31, 2017 Difference Favorable Unfavorable Neither Favorable Budget Actual nor Unfavorable 7,800 9,000 1,200 Favorable Sales in units Variable expenses Sales commissions $1,560 $2,160 $600 Unfavorable Advertising expense 1,092 810 282 Favorable 3,276 3,600 324 unfavorable Travel expense Free samples given out 1,170 1,080 90 Favorable Total variable 7,098 7,650 552 Unfavorable Fixed expenses 1,900 1,900 0- Neither Favorable nor Unfavorable Rent 1,400 1,400 0- Neither Favorable nor Unfavorable Sales salaries Office salaries 600 600 0- Neither Favorable nor Unfavorable Depreciation (sales staff) 500 500 -0- Neither Favorable nor Unfavorable Total fixed 4,400 4,400 0- Neither Favorable nor Unfavorable $11,498 $12,050 $552 Unfavorable Total expenses