Question

The Real Estate Products Division of McKenzie Co. is operated as a profit center. Sales for the division were budgeted for 2019 at $1,250,000. The only variable costs budgeted for the division were cost of goods sold ($610,000) and selling and administrative ($80,000). Fixed costs were budgeted at $130,000 for cost of goods sold, $120,000 for selling and administrative and $95,000 for noncontrollable fixed costs. Actual results for these items were:

Answer 1

Requirement: Prepare a responsibility report for the Real Estate Products Division of McKenzie Co for 2019.

Note: See missing word attached as picture below

Responsibility report 2019

Budget Actual Difference

Sales $1,250,000 $1,175,000 75000 U

Variable costs

Cost of goods sold 610,000 545,000 65000 F

Selling & Admin 80,000 82,000 2000 U

Total $690,000 $627,000 63000 F

Contribution Margin $560,000 $548,000 12000 U

Controllable fixed cost

Cost of goods sold 130,000 140,000 10000 U

Selling & Admin 120,000 100,000 20000 F

Total $250,000 $240,000 10000 F

Controllable Margin $310,000 $308,000 2000U