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Greene Enterprises prepares monthly departmental reports in an effort to control its operating costs. Each department has a manager to whom the report is addressed and who is held responsible for the operating results in his or her department. The report made to Department D for October follows: Budgeted Actual Sales $56,000 $63,000 Costs of goods sold 39,200 37,800 Gross margin 16,800 25,200 Direct operating expenses* 16,720 18,000 Contribution to indirect expense $80 $7,200
of which $10,000 are costs not varying directly with sales volume at the expected level of sales.
Required:
Prepare a report that will be of more value in analyzing and appraising the performance of the manager of Department D for October. Comment on the operating results.
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