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
Total Fixed CostsVariable CostsRentTotal Variable CostsTotal CostsSales SalariesOffice SalariesTravel ExpenseFixed CostsAdvertising ExpenseDepreciationSale Staff AutosSales in UnitsFree SamplesSales Commissions
Total CostsTotal Variable CostsSales SalariesTotal Fixed CostsOffice SalariesDepreciationSale Staff AutosRentFixed CostsTravel ExpenseSales CommissionsAdvertising ExpenseVariable CostsSales in UnitsFree Samples
Variable CostsSales CommissionsAdvertising ExpenseOffice SalariesDepreciationSale Staff AutosTotal Variable CostsTotal CostsFixed CostsFree SamplesRentSales in UnitsSales SalariesTotal Fixed CostsTravel Expense		$		$		$	UnfavorableFavorableNeither Favorable nor Unfavorable
Total CostsSales CommissionsVariable CostsDepreciationSale Staff AutosSales SalariesAdvertising ExpenseTotal Fixed CostsTotal Variable CostsFree SamplesFixed CostsSales in UnitsOffice SalariesTravel ExpenseRent							Neither Favorable nor UnfavorableFavorableUnfavorable
Sales in UnitsDepreciationSale Staff AutosSales SalariesTotal Variable CostsTravel ExpenseRentTotal CostsTotal Fixed CostsFixed CostsSales CommissionsFree SamplesOffice SalariesVariable CostsAdvertising Expense							FavorableNeither Favorable nor UnfavorableUnfavorable
Sales CommissionsSales in UnitsVariable CostsSales SalariesOffice SalariesTotal CostsAdvertising ExpenseDepreciationSale Staff AutosTotal Fixed CostsTotal Variable CostsFixed CostsFree SamplesTravel ExpenseRent							UnfavorableFavorableNeither Favorable nor Unfavorable
Sales SalariesDepreciationSale Staff AutosRentTotal Variable CostsSales CommissionsTravel ExpenseFree SamplesVariable CostsSales in UnitsTotal CostsTotal Fixed CostsAdvertising ExpenseFixed CostsOffice Salaries							UnfavorableFavorableNeither Favorable nor Unfavorable
Travel ExpenseDepreciationSale Staff AutosAdvertising ExpenseFixed CostsTotal Variable CostsOffice SalariesRentFree SamplesVariable CostsTotal Fixed CostsSales SalariesSales CommissionsSales in UnitsTotal Costs
Total Variable CostsSales CommissionsSales SalariesTotal CostsTravel ExpenseTotal Fixed CostsVariable CostsFree SamplesAdvertising ExpenseDepreciationSale Staff AutosFixed CostsOffice SalariesRentSales in Units							UnfavorableFavorableNeither Favorable nor Unfavorable
Travel ExpenseVariable CostsFixed CostsTotal Fixed CostsTotal Variable CostsAdvertising ExpenseSales CommissionsDepreciationSale Staff AutosTotal CostsFree SamplesSales SalariesOffice SalariesRentSales in Units							FavorableNeither Favorable nor UnfavorableUnfavorable
RentSales CommissionsDepreciationSale Staff AutosAdvertising ExpenseTotal Fixed CostsSales in UnitsTravel ExpenseSales SalariesFixed CostsTotal CostsTotal Variable CostsVariable CostsFree SamplesOffice Salaries							UnfavorableFavorableNeither Favorable nor Unfavorable
Travel ExpenseRentFixed CostsVariable CostsAdvertising ExpenseSales CommissionsOffice SalariesSales in UnitsFree SamplesSales SalariesTotal CostsTotal Fixed CostsDepreciationSale Staff AutosTotal Variable Costs							UnfavorableFavorableNeither Favorable nor Unfavorable
Sales CommissionsAdvertising ExpenseFixed CostsTotal CostsOffice SalariesTotal Variable CostsTravel ExpenseTotal Fixed CostsVariable CostsSales in UnitsDepreciationSale Staff AutosFree SamplesRentSales Salaries							UnfavorableFavorableNeither Favorable nor Unfavorable
DepreciationSale Staff AutosTravel ExpenseFixed CostsRentFree SamplesOffice SalariesSales SalariesSales CommissionsTotal Variable CostsAdvertising ExpenseSales in UnitsTotal Fixed CostsTotal CostsVariable Costs		$		$		$	Neither Favorable nor UnfavorableUnfavorableFavorable

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