As sales manager, Joe Batista was given the following static budget report for selling expenses in the Clothing Department of Soria Company for the month of October.

As a result of this budget report, Joe 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. Joe knew something was wrong with the performance report that he had been given. However, he was not sure what to do, and comes to you for advice.
Instructions
(a) Prepare a budget report based on flexible budget data to help Joe.
(b) Should Joe have been reprimanded? Explain.
Prepare flexible budget and responsibility report for manufacturing overhead.

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SORIA COMPANY Clothing Department Budget Report For the Month Ended October 31, 2017 Difference Budget Actual Favorable FUnfavorable U Sales in units 8.000 10,000 2,000 F Variable expenses Sales commissions Advertising expense Travel expense Free samples given out $ 2,400 $ 2,600 720 850 3,600 4,100 1600 1400 8,320 8.950 $200 U 130 U 200 F Total variable Fixed expenses 630 U Rent Sales salaries Office salaries Depreciation-autos (sales staff 1,500 1,500 1,2001,200 80080 50500 4.0004.000 Total fixed Total expenses $12,320 $12,950