Question

Torres Company accumulates the following summary data for the year ending December 31, 2020, for its Water Division, which it operates as a profit center: sales—$1,935,600 budget, $2,243,000 actual; variable costs—$1,016,200 budget, $1,051,200 actual; and controllable fixed costs—$297,600 budget, $303,400 actual.

Prepare a responsibility report for the Water Division for the year ending December 31, 2020.

TORRES COMPANY Water Division Responsibility Report For the Year Ended December 31, 2020
						Difference
		Budget		Actual		Favorable Unfavorable Neither Favorable nor Unfavorable
Select an opening responsibility report item Gross ProfitFixed CostsVariable CostsNet Income/(Loss)Controllable Fixed CostsControllable MarginContribution MarginSales		$Enter a dollar amount		$Enter a dollar amount		$Enter the difference	Select an option FavorableUnfavorableNeither Favorable nor Unfavorable
Select a responsibility report item Variable CostsSalesContribution MarginFixed CostsGross ProfitControllable Fixed CostsControllable MarginNet Income/(Loss)		Enter a dollar amount		Enter a dollar amount		Enter the difference	Select an option FavorableUnfavorableNeither Favorable nor Unfavorable
Select a responsibility report item SalesControllable Fixed CostsGross ProfitControllable MarginVariable CostsFixed CostsNet Income/(Loss)Contribution Margin		Enter a total of the two previous amounts		Enter a total of the two previous amounts		Enter the difference	Select an option FavorableUnfavorableNeither Favorable nor Unfavorable
Select a responsibility report item Gross ProfitControllable Fixed CostsControllable MarginVariable CostsContribution MarginNet Income/(Loss)SalesFixed Costs		Enter a dollar amount		Enter a dollar amount		Enter the difference	Select an option FavorableUnfavorableNeither Favorable nor Unfavorable
Select a closing responsibility report item Controllable Fixed CostsNet Income/(Loss)Fixed CostsVariable CostsControllable MarginContribution MarginSalesGross Profit		$Enter a total amount for this statement		$Enter a total amount for this statement		$Enter the difference	Select an option FavorableUnfavorableNeither Favorable nor Unfavorable

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Answer 1

	Budget	Actual
Sales	1,935,600	2,243,000	307,400 Favourable
Variable costs	1,016,200	1,051,200	35,000 Unfavorable
Contribution margin	919,400	1,191,800	272,400 Favourable
Fixrd costs	297,600	303,400	5,800 Unfavorable
Controllable margin	621,800	888,400	266,600 Favourable

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