Managerial Accounting: E21-10 As sales manager, Joe Batista was given the following (Soria Co)

Managerial Accounting
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.
Clothing Department
Budget Report
For the Month Ended October 31, 2014
Budget Actual Difference
Favorable (F) / Unfavorable (U)
Sales in units 8,000 10,000 2,000 F
Variable expenses
    Sales commissions 2,000 2,600 600 U
    Advertising expense 800 850 50 U
    Travel expense 3,600 4,000 400 U
    Free samples given out 1,600 1,300 300 F
       Total variable 8,000 8,750 750 U
Fixed expenses
     Rent 1,500 1,500 -
     Sales salaries 1,200 1,200 -
     Office salaries 800 800 -
     Depreciation—autos (sales staff) 500 500 -
       Total fixed 4,000 4,000 -
Total expenses 12,000 12,750 750 U

As a result of this budget report, Joe was called into the president’s 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.

a. Prepare a budget report based on flexible budget data to help Joe. (If answer is zero, please enter 0, do not leave any fields blank.)
b. Should Joe have been reprimanded as per the flexible budget report?
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