Exercise 10-9 a

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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.

SORIA COMPANY Clothing Department Budget Report For the Month Ended October 31, 2020
					Difference
	Budget		Actual		Favorable Unfavorable Neither Favorable nor Unfavorable
Sales in units	8,000		10,000		2,000	Favorable
Variable expenses
Sales commissions	$2,400		$2,600		$200	Unfavorable
Advertising expense	720		850		130	Unfavorable
Travel expense	3,600		4,100		500	Unfavorable
Free samples given out	1,600		1,400		200	Favorable
Total variable	8,320		8,950		630	Unfavorable
Fixed expenses
Rent	1,500		1,500		0	Neither Favorable nor Unfavorable
Sales salaries	1,200		1,200		0	Neither Favorable nor Unfavorable
Office salaries	800		800		0	Neither Favorable nor Unfavorable
Depreciationautos (sales staff)	500		500		0	Neither Favorable nor Unfavorable
Total fixed	4,000		4,000		0	Neither Favorable nor Unfavorable
Total expenses	$12,320		$12,950		$630	Unfavorable

As a result of this budget report, Joe was called into the presidents 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. Prepare a budget report based on flexible budget data to help Joe.