Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2017, are as shown below.

In addition, Clarke incurs $180,000 of indirect fixed costs that were budgeted at $175,000. Twenty percent (20%) of these costs are allocated to the Patio Furniture Division.
Instructions
(a) Prepare a responsibility report for the Patio Furniture Division for the year.
(b) images Comment on the manager's performance in controlling revenues and costs.
(c) Identify any costs excluded from the responsibility report and explain why they were excluded.
(a) Contribution margin $85,000 F (b) Controllable margin $80,000 F
Prepare responsibility report for an investment center, and compute ROI.

Transcribed Image Text:

Budget $2,500,0oo Difference from Budget Sales Cost of goods sold 50,000 F Variable Controllable fixed 1,300,0oo 41,000 F 3,000 U 200,00O Selling and administrative Variable Controllable fixed 220,000 50,000 70,ooo 6,000 U 2,000 U 4,000 U Noncontrollable fixed costs