Exercise 10-16

The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2017 at $900,000. The only variable costs budgeted for the division were cost of goods sold ($440,000) and selling and administrative ($60,000). Fixed costs were budgeted at $100,000for cost of goods sold, $90,000for selling and administrative, and $70,000for noncontrollable fixed costs. Actual results for these items were:

Sales$880,000Cost of goods soldVariable408,000Fixed105,000Selling and administrativeVariable61,000Fixed66,000Noncontrollable fixed90,000

Prepare a responsibility report for the Sports Equipment Division for 2017.(List variable costs before fixed costs.)

HARRINGTON COMPANY

Sports Equipment Division

Responsibility Report

2017

Budget

Actual

Difference

Favorable

Unfavorable

Neither Favorable