What is the formula for the cost per unit for the flexible budget report?
As sales manager, Hank Short was given the following static budget report for selling expenses in the Winter Sports Department of Jennings Outdoor Company for the month of November. Jennings Outdoor Company Winter Sports Department Budget Report For the Month Ended November 30, 2020 Difference Favorable F Budget Actual Unfavorable U Sales in units 4,000 4,500 500 F Variable expenses Sales commissions $132,000 $140,900 $8,900 U Advertising expense 40,000 43,600 3,600 U Travel expense 176,000 191,600 15,600 U Demonstration models given out 92,000 82,000 10,000 F Total variable 440,000 458,100 18,100 U Fixed expenses Rent 8,000 8,000 -0- Sales salaries 59,600 59,600 -0- Ofce salaries 39,600 39,600 -0- Depreciation vans (sales staff) 2,700 3,300 * 600 U Total xed 109,900 110,500 600 U Total expenses $549,900 $568,600 $18,700 U *The increase in depreciation was due to a new vehicle that had to be purchased as a result of an accident driving on snowy roads on the way to visit a customer. Prepare a budget report based on exible budget data to help Hank. (Round per unit answers to 2 decimal places, e3. 15.25.) Jennings Outdoor Company Winter Sports Department Flexible Budget Report For the Month Ended November 30, 2020 6 5 Per Unit Budget Actual _| Sales in Units 4500 4500 Variable Expenses Sales Commissions c $ 33 $ 148500 $ 140900 $ 74 Advertising Expense 10 45000 43600 1' Travel Expense 44 198000 19 1600 6' Free Demonstration Models 23 103500 82000 21! Total Variable 9 $ 110 495000 458100 36' Fixed Expenses Rent 8000 8000 Sales Salaries 59600 59600 Office Salaries 39600 39600 Depreciation - Auto (Sales Staff) 2700 3300 (600) Total Fixed 109900 110500 600 Total Expenses to 604900 to 568600 36300 eTextbook and Media Attempts: 2 of 3 used (b) Your answer is correct. Should Hank have been reprimanded? Explain. Hank should not + be reprimanded as Hank managed the expenses in his department.After Hank because familiar with the flexible budget report, he began to analyze the numbers. Hank feels that sales can be increased if Jennings Outdoor Company would increase sales commissions to $34.00 per unit. This would allow them to reduce advertising expense to $8.00 per unit. Hank thinks that these changes will motivate the sales staff to sell at least 5,400 units. He is allowed to try his plan in December and had the following results. Jennings Outdoor Company Winter Sports Department Results For the Month Ended December 31, 2020 Sales in units 5,400 Variable expenses Sales commissions $176,900 Advertising expense 41,400 Travel expense 230,000 Demonstration models given out 102,600 Total variable 550,900 Fixed expenses Rent 8,000 Sales salaries 59,600 Office salaries 39,600 Depreciation - vans (sales staff) 3,300 Total fixed 110,500 Total expenses $661,400 Prepare a budget report based on flexible budget data. The new depreciation amount has been included in the budgeted fixed costs. (Round per unit answers to 2 decimal places, e.g. 15.25.)Jennings Outdoor Company Winter Sports Department Flexible Budget Report For the Month Ended December 31, 2020 9 g Neil Per Unit Budget Actual M Sales in U nits 9 5400 5400 Variable Expenses 9 Sales Commissions 9 30 $ 176900 Advertising Expense 9 8 41400 Travel Expense 9 48 230000 Free Demonstration Models 9 27 102600 Total Variable 9 113 550900 Fixed Expenses 9 Rent 9 8000 8000 0 Sales Salaries 59600 59600 O Office Salaries 39600 39600 0 Depreciation - Auto (Sales Staff) 2700 3300 600 Total Fixed 109900 110500 600 Total Expenses 4 $ 661400 $ Do you think the new plan is valid? Explain. It appears that the new plan is a good choice as favorable total variance is higher by $ than in November
