Clarke Inc. operates the Patio Furniture Division as a profit center. Operating data for this division for the year ended December 31, 2014, 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.
(a) Prepare a responsibility report for the Patio Furniture Division for the year.
(b) Comment on the managerâs performance in controlling revenues and costs.
(c) Identify any costs excluded from the responsibility report and explain why they wereexcluded.