Ryhan Company is a multinational computer services firm. The management of the company is decentralized, with division managers heading the following three divisions: Europe, Asia, and the Americas. Within each division, the three sources of revenue are software sales, service contracts, and consulting fees.

The following data are applicable to revenue in 2000:

1. Prepare a responsibility accounting report for the head of the Europe division. For each of the three revenue sources (software sales, service contracts, and consulting fees), show whether the variance between budget and actual is favorable or unfavorable

2. Prepare a responsibility accounting report for the head of the entire company. The company head wants to see only the overall results for each of the three geographic divisions (budget vs. actual); a detailed breakdown by revenue source is not requested.

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Budget Actual Europe-software sales.. Asia-software sales. $200,000 $230,000 200,000 130,000 Americas-software sales 350,000 420,000 Europe-service contracts. 120,000 90,000 Asia-service contracts 70,000 80,000 Americas-service contracts 250,000 190,000 Europe consulting fees 40,000 90,000 Asia-consulting fees. 50,000 35,000 Americas-consulting fees. 100,000 60,000