As sales manager, Terry Dewitt was given the following static budget report for selling expenses in the Clothing Department of Garber Company for the month of October.

Instructions(a) Prepare a responsibility report for the first quarter of 2010 for the Home Plumbing Services segment.(b) Write a memo to Paul Pronto discussing the principles that should be used when preparing performancereports.

GARBER COMPANY Clothing Department Selling Expense Budget Report For the Month Ended October 31, 2010 Difference Favorable F Budget Actual Unfavorable U Sales in units 8,000 10,000 2,000 F Variable expenses Sales commissions $ 2,000 $ 2,600 $ 600 U 50 U Advertising expense. Travel expense Free samples given out 800 850 3,600 4,000 400 U 1,600 1,300 300 F 8,000 Total variable 8,750 750 U Fixed expenses Rent 1,500 1,500 -0- Sales salaries 1,200 1,200 Office salaries 800 800 500 Depreciation-autos (sales staff) 500 Total fixed 4,000 4,000 $ 750 U Total expenses $12,000 $12,750