As sales manager, John was given the Dunham Company for the month of C

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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D.
1.
Flexible Budget Report (2 Requirements below)
2.
As sales manager, John was given the following static budget report in the clothing department of
3.
Dunham Company for the month of October:
4.
DUNHAM COMPANY
Clothing Department
Static Budget Report
Month Ended October 31, 2020
5.
7.
U, F or N/A
3,100 Favourable
Actual
Budget
Variance
7,900
Sales in Units
10 Variable Costs
11 Sales commissions
12 Advertising expense
13 Travel expense
14 Free samples given out
15 Total variable costs
16 Fixed costs
9.
11,000
1,074 Unfavourable
336 Favourable
$2,970
$1,896
770
1,106
3,318
3,850
1,210
8,800
532 Unfavourable
25 Unfavourable
1,295 Unfavourable
1 185
7,505
17 Rent
1,200
1,000
700
400
N/A
N/A
N/A
1,200
18 Sales salaries
19 Office salaries
1,000
700
20 Depreciation - vehicles
400
N/A
21
Total fixed costs
N/A
1,295 Unfavourable
3,300
3 300
22 Total costs
$12,100
$10,805
23 As a result of this report, John was called into the president's office and congratulated on his fine sales
24 performance. He was reprimanded, however, for allowing his costs to get out of control. John was not
25 sure what to do and has come to you for advice.
26 Complete the 2 Requirements below:
1. Prepare a budget report based on flexible budget data to help John.
28
27
Flexible Budget Report
29 2. Should John have been reprimanded? Explain.
30
Transcribed Image Text:D. 1. Flexible Budget Report (2 Requirements below) 2. As sales manager, John was given the following static budget report in the clothing department of 3. Dunham Company for the month of October: 4. DUNHAM COMPANY Clothing Department Static Budget Report Month Ended October 31, 2020 5. 7. U, F or N/A 3,100 Favourable Actual Budget Variance 7,900 Sales in Units 10 Variable Costs 11 Sales commissions 12 Advertising expense 13 Travel expense 14 Free samples given out 15 Total variable costs 16 Fixed costs 9. 11,000 1,074 Unfavourable 336 Favourable $2,970 $1,896 770 1,106 3,318 3,850 1,210 8,800 532 Unfavourable 25 Unfavourable 1,295 Unfavourable 1 185 7,505 17 Rent 1,200 1,000 700 400 N/A N/A N/A 1,200 18 Sales salaries 19 Office salaries 1,000 700 20 Depreciation - vehicles 400 N/A 21 Total fixed costs N/A 1,295 Unfavourable 3,300 3 300 22 Total costs $12,100 $10,805 23 As a result of this report, John was called into the president's office and congratulated on his fine sales 24 performance. He was reprimanded, however, for allowing his costs to get out of control. John was not 25 sure what to do and has come to you for advice. 26 Complete the 2 Requirements below: 1. Prepare a budget report based on flexible budget data to help John. 28 27 Flexible Budget Report 29 2. Should John have been reprimanded? Explain. 30
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