Monday 1 October 2012

Johnson Manufacturing Inc. operates the Patio Furniture Division as a profit center. Operating

Problem 24-4A


 



Your answer is correct.

 

 

Johnson Manufacturing Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2012, are as shown below.



Budget


Difference
from Budget

Sales


$2,500,000


$60,000

F

Cost of goods sold






       Variable


1,300,000


41,000

F

       Controllable fixed


200,000


6,000

U

Selling and administrative






       Variable


220,000


7,000

U

       Controllable fixed


50,000


2,000

U

Noncontrollable fixed costs


70,000


4,000

U


In addition, Johnson Manufacturing incurs $180,000 of indirect fixed costs that were budgeted at $175,000. Twenty percent (20%) of these costs are allocated to the Patio Furniture Division.

Prepare a responsibility report for the Patio Furniture Division for the year.

 



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