Question

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		170,000		On target
Controllable fixed selling and administrative expenses		77,000		On target

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

Answer 1

Answer:

Problem 23-5A

satement showing computations
Particulars	Budget	Actual	Difference	F or U or N
Sales	1301000	1401000	100000	F
Variable Costs :
Costs of goods sold	625000	680000	55000	U
Selling and admin costs	101000	126000	25000	U
Total Variable Costs	726000	806000	80000	U
Contribution Margin	575000	595000	20000	F
Controllable Direct Fixed Costs
Costs of goods sold	170000	170000	-	N
Selling and admin costs	77000	77000	-	N

Total Fixed Cost	247000	247000	-	N
profit	328000	34800	20000	F
ROI	25.211%	24.84%	0.371%	U