The accountant for a subunit of Bellamy Sports Company went on vacation before completing the subunit’s monthly responsibility report. This is as far as she got:
Subunit X Revenue by Product
Actual Results
Flexible Budget Variance
Flexible Budget
Sales Volume Variance
Static Budget
Downhill – RI
$326,000
(a)
(b)
$19,000 F
$301,000
Downhill – RII
154,000
(c)
$164,000
(d)
148,000
Cross-EXI
280,000
$1,000 U
281,000
(e)
297,000
Cross-EXII
254,000
(f)
249,000
16,500 U
265,500
Snow-LXI
424,000
2,000 F
(g)
(h)
402,000
Total
$1,438,000
(i)
(j)
(k)
$1,413,500
Requirements
1. Complete the responsibility report for this subunit.
2. Based on the data presented, what type of responsibility center is this subunit?
3. Which items should be investigated if part of management’s decision criteria is to investigate all variances exceeding $10,000?