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	8,000		10,000		2,000	Favorable
Variable expenses
Sales commissions	$2,400		$2,600		$200	Unfavorable
Advertising expense	720		850		130	Unfavorable
Travel expense	3,600		4,100		500	Unfavorable
Free samples given out	1,600		1,400		200	Favorable
Total variable	8,320		8,950		630	Unfavorable
Fixed expenses
Rent	1,500		1,500		0	Neither Favorable nor Unfavorable
Sales salaries	1,200		1,200		0	Neither Favorable nor Unfavorable
Office salaries	800		800		0	Neither Favorable nor Unfavorable
Depreciationautos (sales staff)	500		500		0	Neither Favorable nor Unfavorable
Total fixed	4,000		4,000		0	Neither Favorable nor Unfavorable
Total expenses	$12,320		$12,950		$630	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.)

SORIA COMPANY Selling Expense Flexible Budget Report Clothing Department For the Month Ended October 31, 2017
						Difference
		Budget		Actual		Favorable Unfavorable Neither Favorable nor Unfavorable
Office SalariesSales CommissionsTotal Variable CostsFree SamplesTotal Fixed CostsRentFixed CostsSales in UnitsVariable CostsSales SalariesTravel ExpenseTotal CostsAdvertising ExpenseDepreciationSale Staff Autos
Office SalariesSales CommissionsSales in UnitsAdvertising ExpenseVariable CostsRentSales SalariesTotal CostsFixed CostsTotal Fixed CostsDepreciationSale Staff AutosTotal Variable CostsFree SamplesTravel Expense
Total CostsFree SamplesDepreciationSale Staff AutosTotal Fixed CostsSales in UnitsTravel ExpenseOffice SalariesRentSales SalariesFixed CostsTotal Variable CostsVariable CostsAdvertising ExpenseSales Commissions		$		$		$	FavorableNeither Favorable nor UnfavorableUnfavorable
Fixed CostsFree SamplesTotal Fixed CostsTotal CostsAdvertising ExpenseDepreciationSale Staff AutosTotal Variable CostsOffice SalariesRentTravel ExpenseVariable CostsSales CommissionsSales in UnitsSales Salaries							UnfavorableNeither Favorable nor UnfavorableFavorable
Total Fixed CostsRentTravel ExpenseDepreciationSale Staff AutosSales in UnitsTotal Variable CostsVariable CostsSales SalariesAdvertising ExpenseFixed CostsTotal CostsFree SamplesOffice SalariesSales Commissions							UnfavorableNeither Favorable nor UnfavorableFavorable
Free SamplesSales CommissionsTotal Variable CostsDepreciationSale Staff AutosSales SalariesTotal Fixed CostsTravel ExpenseVariable CostsOffice SalariesTotal CostsRentSales in UnitsAdvertising ExpenseFixed Costs							UnfavorableNeither Favorable nor UnfavorableFavorable
Office SalariesSales in UnitsTotal Fixed CostsTotal CostsSales SalariesTotal Variable CostsRentFree SamplesTravel ExpenseVariable CostsSales CommissionsAdvertising ExpenseDepreciationSale Staff AutosFixed Costs							UnfavorableFavorableNeither Favorable nor Unfavorable
Total Variable CostsDepreciationSale Staff AutosFixed CostsVariable CostsFree SamplesSales CommissionsOffice SalariesSales SalariesAdvertising ExpenseTotal Fixed CostsTravel ExpenseRentTotal CostsSales in Units
Variable CostsAdvertising ExpenseDepreciationSale Staff AutosRentTravel ExpenseFixed CostsSales in UnitsFree SamplesTotal CostsTotal Variable CostsSales SalariesOffice SalariesTotal Fixed CostsSales Commissions							UnfavorableFavorableNeither Favorable nor Unfavorable
Fixed CostsVariable CostsTotal Variable CostsTotal CostsTravel ExpenseAdvertising ExpenseDepreciationSale Staff AutosSales in UnitsTotal Fixed CostsFree SamplesOffice SalariesRentSales CommissionsSales Salaries							FavorableNeither Favorable nor UnfavorableUnfavorable
Total CostsRentTotal Variable CostsFree SamplesFixed CostsTotal Fixed CostsOffice SalariesSales SalariesSales CommissionsTravel ExpenseSales in UnitsVariable CostsAdvertising ExpenseDepreciationSale Staff Autos							UnfavorableFavorableNeither Favorable nor Unfavorable
Fixed CostsTotal Variable CostsRentTotal Fixed CostsOffice SalariesDepreciationSale Staff AutosSales SalariesSales CommissionsTravel ExpenseSales in UnitsTotal CostsVariable CostsAdvertising ExpenseFree Samples							UnfavorableFavorableNeither Favorable nor Unfavorable
Total Variable CostsFree SamplesOffice SalariesRentSales SalariesAdvertising ExpenseDepreciationSale Staff AutosSales CommissionsSales in UnitsTravel ExpenseVariable CostsFixed CostsTotal CostsTotal Fixed Costs							Neither Favorable nor UnfavorableFavorableUnfavorable
Total Fixed CostsSales in UnitsSales SalariesAdvertising ExpenseFixed CostsTotal Variable CostsTravel ExpenseDepreciationSale Staff AutosRentOffice SalariesSales CommissionsFree SamplesTotal CostsVariable Costs		$		$		$