Question

In: Accounting

Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of tools and industrial equipment. The...

Problem 22-5A (Part Level Submission)

Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2017, and relevant budget data are as follows.

Actual Comparison with Budget Sales

$1,399,000 $100,000 favorable

Variable cost of goods sold 675,000 54,000 unfavorable

Variable selling and administrative expenses 124,000 24,000 unfavorable

Controllable fixed cost of goods sold 170,000 On target

Controllable fixed selling and administrative expenses 79,000 On target

Average operating assets for the year for the Home Division were $2,001,000 which was also the budgeted amount.

(a)

Prepare a responsibility report for the Home Division. (List variable costs before fixed costs. Round ROI to 1 decimal place, e.g. 1.5.)

Solutions

Expert Solution

Budget

Actual

Difference

Sales (a)

$1,299,000

$1,399,000

$100,000

Favorable

Variable Costs

Cost of Goods Sold (b)

$621,000

$675,000

$54,000

Unfavorable

Selling and Administrative (c )

$100,000

$124,000

$24,000

Unfavorable

Total Variable Cost (d=b+c)

$721,000

$799,000

$78,,000

Unfavorable

Contribution Margin (e = a-d)

$578,000

$600,000

$22,000

Favorable

Fixed Costs

Controllable fixed cost of goods sold (f)

$170,000

$170,000

$0

Neither Favorable
nor Unfavorable

Controllable fixed selling and administrative expenses (g)

$79,000

$79,000

$0

Neither Favorable
nor Unfavorable

Total Fixed Costs (h = f+g)

$249,000

$249,000

$0

Neither Favorable
nor Unfavorable

Controllable Margin (i = e - h)

$329,000

$351,000

$22,000

Favorable

ROI (Controllable Margin / Avg Assets)

16.44%

17.54%

1.10%

Favorable


Related Solutions

                Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of tools and industrial equipment....
                Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2017, and relevant budget data are as follows.                                                                                                                                                                                              Actual                   Comparison with Budget Sales                                                                                     $1,400,000                           $101,000              favorable Variable cost of goods sold                                                           675,000                 55,000         unfavorable Variable selling and administrative expenses                       126,000                 25,000  ...
Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of tools and industrial equipment. The...
Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2017, and relevant budget data are as follows. Actual Comparison with Budget Sales $1,401,000 $101,000 favorable Variable cost of goods sold 675,000 55,000 unfavorable Variable selling and administrative expenses 124,000 25,000 unfavorable Controllable fixed cost of goods sold 170,000 On target...
Type or paste question here Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of...
Type or paste question here Problem 22-5A (Part Level Submission) Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2017, and relevant budget data are as follows. Actual Comparison with Budget Sales $1,399,000 $101,000 favorable Variable cost of goods sold 676,000 56,000 unfavorable Variable selling and administrative expenses 124,000 25,000 unfavorable Controllable fixed cost of...
Problem 23-5A a, c (Video) (Part Level Submission) Sunland Company manufactures a variety of tools and...
Problem 23-5A a, c (Video) (Part Level Submission) Sunland Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2020, and relevant budget data are as follows. Actual Comparison with Budget Sales $1,401,000 $100,000 favorable Variable cost of goods sold 680,000 55,000 unfavorable Variable selling and administrative expenses 126,000 25,000 unfavorable Controllable fixed cost of goods sold...
Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions....
Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2020, and relevant budget data are as follows. Actual Comparison with Budget Sales $1,401,000 $101,000 favorable Variable cost of goods sold 680,000 55,000 unfavorable Variable selling and administrative expenses 125,000 26,000 unfavorable Controllable fixed cost of goods sold 169,000 On target Controllable fixed selling and administrative...
Exercise 22-16 (Part Level Submission) The Sports Equipment Division of Harrington Company is operated as a...
Exercise 22-16 (Part Level Submission) The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2017 at $904,930. The only variable costs budgeted for the division were cost of goods sold ($441,160) and selling and administrative ($62,530). Fixed costs were budgeted at $100,550 for cost of goods sold, $93,740 for selling and administrative, and $74,730 for noncontrollable fixed costs. Actual results for these items were: Sales $883,910 Cost of goods...
Problem 9-5A (Part Level Submission) At December 31, 2015, Grand Company reported the following as plant...
Problem 9-5A (Part Level Submission) At December 31, 2015, Grand Company reported the following as plant assets. Land $4,147,000 Buildings $27,842,000 Less: Accumulated depreciation—buildings 10,769,000 17,073,000 Equipment 48,828,000 Less: Accumulated depreciation—equipment 5,126,000 43,702,000 Total plant assets $64,922,000 During 2016, the following selected cash transactions occurred. April 1 Purchased land for $2,195,000. May 1 Sold equipment that cost $786,000 when purchased on January 1, 2012. The equipment was sold for $471,600. June 1 Sold land purchased on June 1, 2006 for...
Problem 14-5A (Part Level Submission) Empire Company is a manufacturer of smart phones. Its controller resigned...
Problem 14-5A (Part Level Submission) Empire Company is a manufacturer of smart phones. Its controller resigned in October 2017. An inexperienced assistant accountant has prepared the following income statement for the month of October 2017. EMPIRE COMPANY Income Statement For the Month Ended October 31, 2017 Sales revenue $ 780,000 Less: Operating expenses Raw materials purchases $ 264,000 Direct labor cost 190,000 Advertising expense 90,000 Selling and administrative salaries 75,000 Rent on factory facilities 60,000 Depreciation on sales equipment 45,000...
Problem 6-5A (Part Level Submission) You are provided with the following information for Najera Inc. for...
Problem 6-5A (Part Level Submission) You are provided with the following information for Najera Inc. for the month ended June 30, 2017. Najera uses the periodic method for inventory. Date Description Quantity Unit Cost or Selling Price June 1 Beginning inventory 40 $40 June 4 Purchase 135 44 June 10 Sale 110 70 June 11 Sale return 15 70 June 18 Purchase 55 46 June 18 Purchase return 10 46 June 25 Sale 65 75 June 28 Purchase 30 50...
Problem 7-5A (Part Level Submission) Ivanhoe Company of Emporia, Kansas, spreads herbicides and applies liquid fertilizer...
Problem 7-5A (Part Level Submission) Ivanhoe Company of Emporia, Kansas, spreads herbicides and applies liquid fertilizer for local farmers. On May 31, 2017, the company’s Cash account per its general ledger showed a balance of $6,858.90. The bank statement from Emporia State Bank on that date showed the following balance. EMPORIA STATE BANK Checks and Debits Deposits and Credits Daily Balance XXX XXX 5-31 7,088.00 A comparison of the details on the bank statement with the details in the Cash...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT