P11.53B (LO 3) Henning Manufacturing Ltd. operates its patio furniture division as a profit centre. Operating data for this division for the year ended December 31, 2022, are as follows:

		Budget		Difference from Budget
Sales		$2,500,000		$60,000 F
Costs of goods sold
Variable costs		1,300,000		41,000 F
Controllable fixed costs		200,000		6,000 U
Selling and administrative expenses
Variable costs		220,000		7,000 U
Controllable fixed costs		50,000		2,000 U
Noncontrollable fixed costs		70,000		4,000 U

In addition, Henning Manufacturing incurred $180,000 of indirect fixed costs that were budgeted at $175,000. It allocates 20% of these costs to the patio furniture division. The division manager cannot control any of these costs.

Instructions

1. Prepare a responsibility report for the patio furniture division for the year.

   a. Controllable margin: $86,000 F

2. Comment on the managers performance in controlling revenues and costs.
3. Identify any costs that have been excluded from the responsibility report and explain why they were excluded.

Prepare a responsibility report for an investment centre, and calculate ROI.