Guzman Manufacturing Inc. operates the Home Appliance Division as a profit center. Operating data for this division for the year ended December 31, 2012, are shown below.

In addition, Guzman Manufacturing incurs $150,000 of indirect fixed costs that were budgeted at $155,000. Twenty percent (20%) of these costs are allocated to the Home Appliance Division. None of these costs are controllable by the division manager.

Instructions
(a) Prepare a responsibility report for the Home Appliance Division (a profit center) for the year.
(b) Comment on the manager€™s performance in controlling revenues and costs.
(c) Identify any costs excluded from the responsibility report and explain why they wereexcluded.

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Difference from Budget Budget $2,400,000 Sales Cost of goods sold $100,000 U Variable Controllable fixed 1,200,000 200,000 60,000 U 8,000 F Selling and administrative Variable Controllable fixed 240,000 60,000 50,000 8,000 F 4,000 U 2,000 U Noncontrollable fixed costs