Question

The Sports Equipment Division of Harrington Company is operated as a profit center. Sales for the division were budgeted for 2020 at $900,000. The only variable costs budgeted for the division were cost of goods sold ($440,000) and selling and administrative ($60,000). Fixed costs were budgeted at $100,000 for cost of goods sold, $90,000 for selling and administrative, and $70,000 for noncontrollable fixed costs. Actual results for these items were:

Sales		$880,000
Cost of goods sold
Variable		408,000
Fixed		105,000
Selling and administrative
Variable		61,000
Fixed		66,000
Noncontrollable fixed		90,000

Prepare a responsibility report for the Sports Equipment Division for 2020. (List variable costs before fixed costs.)

HARRINGTON COMPANY Sports Equipment Division Responsibility Report For the Year Ended December 31, 2020
	Budget		Actual		Difference
					Favorable Unfavorable Neither Favorable nor Unfavorable
Controllable Fixed CostsTotal Noncontrollable Fixed CostsCost of Goods SoldSalesGross ProfitSelling and AdministrativeTotal Controllable Fixed CostsTotal Variable CostsVariable CostsNoncontrollable Fixed CostsContribution MarginControllable Margin	$		$		$	FavorableNeither Favorable nor UnfavorableUnfavorable
Gross ProfitSalesControllable MarginTotal Variable CostsNoncontrollable Fixed CostsTotal Noncontrollable Fixed CostsSelling and AdministrativeCost of Goods SoldTotal Controllable Fixed CostsVariable CostsContribution MarginControllable Fixed Costs
Gross Profit    Variable Costs    Controllable Margin    Total Noncontrollable Fixed Costs    Cost of Goods Sold    Sales    Selling and Administrative    Total Controllable Fixed Costs    Controllable Fixed Costs    Contribution Margin    Total Variable Costs    Noncontrollable Fixed Costs						UnfavorableNeither Favorable nor UnfavorableFavorable
Controllable Fixed Costs    Sales    Controllable Margin    Cost of Goods Sold    Selling and Administrative    Gross Profit    Total Controllable Fixed Costs    Noncontrollable Fixed Costs    Total Variable Costs    Variable Costs    Total Noncontrollable Fixed Costs    Contribution Margin						FavorableNeither Favorable nor UnfavorableUnfavorable
Variable Costs    Total Variable Costs    Noncontrollable Fixed Costs    Cost of Goods Sold    Total Noncontrollable Fixed Costs    Gross Profit    Controllable Fixed Costs    Controllable Margin    Sales    Contribution Margin    Selling and Administrative    Total Controllable Fixed Costs						FavorableUnfavorableNeither Favorable nor Unfavorable
Total Controllable Fixed CostsContribution MarginGross ProfitSelling and AdministrativeSalesVariable CostsControllable Fixed CostsCost of Goods SoldTotal Variable CostsNoncontrollable Fixed CostsTotal Noncontrollable Fixed CostsControllable Margin						UnfavorableNeither Favorable nor UnfavorableFavorable
Gross ProfitVariable CostsNoncontrollable Fixed CostsTotal Noncontrollable Fixed CostsContribution MarginSalesCost of Goods SoldSelling and AdministrativeControllable Fixed CostsTotal Variable CostsControllable MarginTotal Controllable Fixed Costs
Variable Costs    Total Noncontrollable Fixed Costs    Noncontrollable Fixed Costs    Contribution Margin    Controllable Margin    Gross Profit    Sales    Controllable Fixed Costs    Cost of Goods Sold    Selling and Administrative    Total Controllable Fixed Costs    Total Variable Costs						FavorableUnfavorableNeither Favorable nor Unfavorable
Total Noncontrollable Fixed Costs    Total Variable Costs    Variable Costs    Controllable Fixed Costs    Noncontrollable Fixed Costs    Total Controllable Fixed Costs    Gross Profit    Cost of Goods Sold    Controllable Margin    Selling and Administrative    Sales    Contribution Margin						UnfavorableFavorableNeither Favorable nor Unfavorable
Controllable Fixed Costs    Gross Profit    Noncontrollable Fixed Costs    Variable Costs    Controllable Margin    Total Variable Costs    Total Noncontrollable Fixed Costs    Contribution Margin    Cost of Goods Sold    Sales    Selling and Administrative    Total Controllable Fixed Costs						FavorableUnfavorableNeither Favorable nor Unfavorable
Controllable Fixed CostsNoncontrollable Fixed CostsSelling and AdministrativeTotal Controllable Fixed CostsTotal Variable CostsTotal Noncontrollable Fixed CostsVariable CostsContribution MarginCost of Goods SoldControllable MarginGross ProfitSales	$		$		$	UnfavorableNeither Favorable nor UnfavorableFavorable

Answer 1

Solution: