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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
![Prepare a budget report based on flexible budget data to help Joe. (List variable expenses before fixed
expenses.)
SWIFTY COMPANY
Selling Expense Flexible Budget Repor
Clothing Department
Budget
Actual
$
$
$
$
2$
$
(b)
Should Joe have been reprimanded?](https://content.bartleby.com/qna-images/question/3aff2365-9f44-4770-b8e3-e2ed0988bbf7/645e7ea9-5330-4657-9fc0-2f06e872846c/rg6khe_thumbnail.png)
Transcribed Image Text:Prepare a budget report based on flexible budget data to help Joe. (List variable expenses before fixed
expenses.)
SWIFTY COMPANY
Selling Expense Flexible Budget Repor
Clothing Department
Budget
Actual
$
$
$
$
2$
$
(b)
Should Joe have been reprimanded?
![As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing
Department of Swifty Company for the month of October.
SWIFTY COMPANY
Clothing Department
Budget Report
For the Month Ended October 31, 2022
Difference
Favorable
Unfavorable
Neither Favorable
Budget
Actual
nor Unfavorable
Sales in units
9,760
12,200
2,440 Favorable
Variable expenses
Sales commissions
$2,928
$3,172
$244 Unfavorable
Advertising expense
976
1,037
61 Unfavorable
Travel expense
4,392
5,002
610 Unfavorable
Free samples given out
1,952
1,708
244 Favorable
Total variable
10,248
10,919
671 Unfavorable
Fixed expenses
Rent
1,830
1,830
-0- Neither Favorable nor Unfavorable
Sales salaries
1,464
1,464
-0- Neither Favorable nor Unfavorable
Office salaries
976
976
-0- Neither Favorable nor Unfavorable
Depreciation-autos (sales staff)
610
610
-0- Neither Favorable nor Unfavorable
Total fixed
4,880
4,880
-0- Neither Favorable nor Unfavorable
Total expenses
$15,128
$15,799
$671 Unfavorable
As a result of this budget report, Joe was called into the president's office and congratulated on his fine sales
performance. He was reprimanded, however, for allowing his costs to get out of control. Joe knew something was
wrong with the performance report that he had been given. However, he was not sure what to do, and comes to you for
advice.](https://content.bartleby.com/qna-images/question/3aff2365-9f44-4770-b8e3-e2ed0988bbf7/645e7ea9-5330-4657-9fc0-2f06e872846c/jjhvayg_thumbnail.png)
Transcribed Image Text:As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing
Department of Swifty Company for the month of October.
SWIFTY COMPANY
Clothing Department
Budget Report
For the Month Ended October 31, 2022
Difference
Favorable
Unfavorable
Neither Favorable
Budget
Actual
nor Unfavorable
Sales in units
9,760
12,200
2,440 Favorable
Variable expenses
Sales commissions
$2,928
$3,172
$244 Unfavorable
Advertising expense
976
1,037
61 Unfavorable
Travel expense
4,392
5,002
610 Unfavorable
Free samples given out
1,952
1,708
244 Favorable
Total variable
10,248
10,919
671 Unfavorable
Fixed expenses
Rent
1,830
1,830
-0- Neither Favorable nor Unfavorable
Sales salaries
1,464
1,464
-0- Neither Favorable nor Unfavorable
Office salaries
976
976
-0- Neither Favorable nor Unfavorable
Depreciation-autos (sales staff)
610
610
-0- Neither Favorable nor Unfavorable
Total fixed
4,880
4,880
-0- Neither Favorable nor Unfavorable
Total expenses
$15,128
$15,799
$671 Unfavorable
As a result of this budget report, Joe was called into the president's office and congratulated on his fine sales
performance. He was reprimanded, however, for allowing his costs to get out of control. Joe knew something was
wrong with the performance report that he had been given. However, he was not sure what to do, and comes to you for
advice.
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- Briefly (5-10) lines) give a written amswer to the following question: What function does an annual budget serve as a part of a company's performance measurement system and how can a budget be used to encourage goal congruence (or 'alignment')?arrow_forwardAn internal report that helps management compare actual performance and budgeted performance based on actual activity level is called aln): Multiple Choice Static budget performance report. Master budget performance report Fiexible budget performance report. Sales budget performance report. Operating budget performance reportarrow_forwardThe objectives of budgeting are to:a. Establish specific goals for future operations b. Execute plans to achieve the goalsc. Measure performance by periodic comparison of actual with budgeted results d. All of the abovearrow_forward
- Which of the following budgets provides data for different levels of sales volume? Group of answer choices Static budget Flexible budget Sales budget Master budgetarrow_forward1. Explain how operating budgets are prepared. 2. Explain the importance of preparing an operating budget.arrow_forwardHow do you maintain accurate and complete reporting of a budget? And how do you set up guardrails for a budget?arrow_forward
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