Exercise 10-9

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.

SORIA COMPANY Clothing Department Budget Report For the Month Ended October 31, 2017
					Difference
	Budget		Actual		Favorable Unfavorable Neither Favorable nor Unfavorable
Sales in units	7,900		10,000		2,100	Favorable
Variable expenses
Sales commissions	$1,896		$2,400		$504	Unfavorable
Advertising expense	1,027		800		227	Favorable
Travel expense	3,160		4,500		1,340	Unfavorable
Free samples given out	1,185		1,300		115	Unfavorable
Total variable	7,268		9,000		1,732	Unfavorable
Fixed expenses
Rent	1,200		1,200		0	Neither Favorable nor Unfavorable
Sales salaries	1,400		1,400		0	Neither Favorable nor Unfavorable
Office salaries	600		600		0	Neither Favorable nor Unfavorable
Depreciationautos (sales staff)	500		500		0	Neither Favorable nor Unfavorable
Total fixed	3,700		3,700		0	Neither Favorable nor Unfavorable
Total expenses	$10,968		$12,700		$1,732	Unfavorable

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. (List variable costs before fixed costs. Do not leave any answer field blank. Enter 0 for amounts.)

Budget SORIA COMPANY Selling Expense Flexible Budget Report Clothing Department For the Month Ended October 31, 2017 Actual Difference Favorable Unfavorable Neither Favorable nor Unfavorable