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E8-6 As sales manager, Shawn Keyser was given the following static budget report

 
E8-6 As sales manager, Shawn Keyser was given the following static budget repot for selling expenses in the Clothing Department of Dunham company for the month of October.
DUNHAM COMPANY
Clothing Department
Budget Repot
For the month Ended October 31, 2005
Difference
Budget
Actual
Favorable F
Unfavorable U
Sales in units
8,000
10,000
2,000 F
Variable expenses
Sales commissions
$2,000
$2,600
$600 U
Advertising Expense
800
850
50 U
Travel expense
4,400
4,900
500 U
Free sample given out
1,600
1,300
300 F
Total Variable
8,800
9,650
850 U
Fixed expenses
Rent
1,500
1,500
-0-
Sales salaries
1,200
1,200
-0-
Office salaries
800
800
-0-
Depreciation-autos(sales staff)
500
500
-0-
Total fixed
4,000
4,000
-0-
Total expenses
$12,800
$13,650
$850 U
As a result of this budget report, Shawn 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. Shawn knew something was wrong with the performance repot that he had been given. However, he was not sure what to do, and comes to you for advice.
Instructions
(a) Prepare a budget repot based on flexible budget data to help Shawn.
(b) Should Shawn have been reprimanded? Explain