The Rockies Division operates as a profit center. It reports the following for the year.
Budgeted
Actual
Sales $2,035,700 $1,884,600
Variable costs 807,500 751,200
Controllable fixed costs 541,000 541,000
Noncontrollable fixed costs 249,200 249,200
Prepare a responsibility report for the Rockies Division at December 31, 2017.

---> A responsibility performance report is a budget that compares the actual and budgeted amounts of controllable costs in different departments of a company so that necessary actions can be made if unfavourable

So we will not consider the uncontrollable fixed costs

Rockies Division Responsibility Report

Budgeted Actual Variance Remark

Sales $2,035,700 $1,884,600 $151,100 Unfavourable

+Variable costs 807,500 751,200 $56,300 favourable

Contribution $1, 228,200 $1.133,400 $94,800 Unfavourable

margin (sales - variable costs)

-Controllable fixed costs$541,200 $541,200 $0 Neither

Controllable $687,000 $592,200 $94,800 Unfavourable

margin (Contributon margin - controllable magin)

---- if actual sales are less than budgeted sales then it is unfavourable and favourable if the reserve is the case

---- if actual variable cost is more than budgeted costs , it is unfavourable and favorable if the reverse applies