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Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2014, are as
Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2014, are as shown below.
Budget | Difference from Budget | ||||||
Sales revenue | $2,503,280 | $60,050 | F | ||||
Cost of goods sold | |||||||
Variable | 1,291,040 | 36,300 | F | ||||
Controllable fixed | 207,360 | 6,900 | U | ||||
Selling and administrative | |||||||
Variable | 223,200 | 7,390 | U | ||||
Controllable fixed | 47,080 | 1,420 | U | ||||
Noncontrollable fixed costs | 69,110 | 3,740 | U |
In addition, Clarke incurs $175,900 of indirect fixed costs that were budgeted at $170,020. Twenty percent (20%) of these costs are allocated to the Patio Furniture Division. (a) Prepare a responsibility report for the Patio Furniture Division for the year.
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