Exercise 23-09 a

As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing Department of a

Difference Favorable Unfavorable Neither Favorable Budget Actual nor Unfavorable Sales in units 8,200 1 1,000 2,800 Favorable Variable expenses Sales commissions $1,804 $2,750 $946 Unfavorable Advertising expense 820 990 170 Unfavorable Travel expense 3,772 4,950 1, 178 Unfavorable Free samples given out 1,968 1,320 648 Favorable Total variable 8,364 10,010 1,646 Unfavorable Fixed expenses Rent 1,300 1 ,300 -0- Neither Favorable nor Unfavorable Sales salaries 1,300 1,300 -0- Neither Favorable nor Unfavorable Office salaries 800 800 -0- Neither Favorable nor Unfavorable Depreciation-autos (sales staff) 400 400 -0- Neither Favorable nor Unfavorable Total fixed 3,800 3,800 -0- Neither Favorable nor Unfavorable Total expenses $12,164 $13,810 $1,646 Unfavorable As a result of this budget report, Joe was called into the president's 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.)Difference Favorable Unfavorable Neither Favorable Budget Actual nor Unfavorable Sales in Units Variable Expenses Sales Commissions Advertising Expense V Travel Expense v Free Samples Total Variable Expenses Fixed Expenses V Rent Sales Salaries V Office Salaries Depreciation-Sale Staff Autos V Total Fixed Expenses Total Expenses