As sales manager, Kajsa Keyser was given the following static budget report for selling expenses in the clothing department of Dunham Company for the month of October:

As a result of this budget report, Kajsa was called into the president's office mance. She was reprimanded, however, for allowing her costs to get out of control. Kajsa knew something was wrong with the performance report that she had been given. However, she was not sure what to do and has come to you for advice.
Instructions
(a) Prepare a budget report based on flexible budget data to help Kajsa.
(b) Should Kajsa have been reprimanded? Explain.

DUNHAM COMPANY Clothing Department Budget Report Month Ended October 31, 2016 Difference: Favourable (F)/ Budget 8,000 ActualUnfavourable (U) Sales in units Variable costs 10,000 2,000 F Sales commissions Advertising expense Travel expense Free samples given out 2,000 800 2,400 1,600 6,800 2,700 900 2,600 $ 700 U 100 U 200 U 100 F 900 U Total variable costs 7,700 Fixed costs 1,500 1,000 800 Depreciation-vehicles (sales staff)500 3,800 $10,600 Rent Sales salaries Office salaries 1,500 1,000 800 500 3,800 $11,500 Total fixed costs Total costs $ 900 U