Exercise 22-10

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, 2014
			Difference
	Budget	Actual	Favorable (F) Unfavorable (U) Neither Favorable nor Unfavorable (N)
Sales in units	8,200	9,100	900	F
Variable expenses
Sales commissions	$2,132	$2,366	$234	U
Advertising expense	902	910	8	U
Travel expense	3,690	3,276	414	F
Free samples given out	1,968	1,274	694	F
Total variable	8,692	7,826	866	F
Fixed expenses
Rent	1,200	1,200	0	N
Sales salaries	1,200	1,200	0	N
Office salaries	700	700	0	N
Depreciationautos (sales staff)	400	400	0	N
Total fixed	3,500	3,500	0	N
Total expenses	$12,192	$11,326	$866	FAs 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.) Should Joe have been reprimanded?