Problem 22-4A

Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2017, are as shown below.

		Budget		Difference from Budget
Sales		$2,502,600		$53,600	Favorable
Cost of goods sold
Variable		1,293,700		45,000	Favorable
Controllable fixed		191,800		2,500	Unfavorable
Selling and administrative
Variable		219,300		7,400	Unfavorable
Controllable fixed		50,400		2,300	Unfavorable
Noncontrollable fixed costs		74,800		4,200	Unfavorable

In addition, Clarke incurs $180,900 of indirect fixed costs that were budgeted at $170,200. Twenty percent (20%) of these costs are allocated to the Patio Furniture Division. Prepare a responsibility report for the Patio Furniture Division for the year. (List variable costs before fixed costs.)

CLARKE INC. Patio Furniture Division Responsibility Report For the Year Ended December 31, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual