Shipley Company has had a comprehensive budgeting system in operation for several years. Feelings vary among the
Question:
After receiving a copy of this performance report, the supervisor of the Milling Department stated, No one can complain about my department; our variances have been favorable for over a year now.
Weve saved the company thousands of dollars by our excellent cost control. The budget data above are for the original planned level of activity for the quarter.
Required:
1. The production superintendent is uneasy about the performance reports being prepared and would like you to evaluate their usefulness to the company.
2. What changes, if any, should be made in the overhead performance report to give better insight into how well the supervisor is controlling costs?
3. Prepare a new overhead performance report for the quarter, incorporating any changes you suggested in (2) above. Include both the variable and the fixed costs in yourreport.
Step by Step Answer:
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer