Mr. Chan, the Fabricating Department Manager of Everyday Company prepared the following responsibility report for performance...

 

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Mr. Chan, the Fabricating Department Manager of Everyday Company prepared the following responsibility report for performance evaluation. He was happy with the good results as there was $44,737 cost saving from the budget amounts. Budgeted production in units Variable costs Direct materials Direct labor Indirect materials Indirect labor Utilities Maintenance Fixed costs Salaries Depreciation Property taxes Insurance Janitorial Total costs Everyday Company Fabricating Department Responsibility Costs Report For the Month of January 2020 Static 176,250 Budgeted $ 264,375 881,250 10,575 17,625 17,625 10,575 63,000 25,200 3,750 1,800 1.950 $1,297,725 Actual 150,000 Actual $ 270,000 825,000 10,650 17,738 16,050 8,850 72,000 25,200 3,750 1,800 1,950 $1,252,988 Required: (a) Prepare a correct responsibility report for fabricating department in January, assuming all variable costs, 40% of salaries and 60% of janitorial costs are controllable by the department manager. Do you agree with Mr. Chan's self-performance evaluation? (12 marks) (b) Suggest the opportunities that the fabricating department (a cost center within the production department) should explore for improving their performance. (5 marks) Mr. Chan, the Fabricating Department Manager of Everyday Company prepared the following responsibility report for performance evaluation. He was happy with the good results as there was $44,737 cost saving from the budget amounts. Budgeted production in units Variable costs Direct materials Direct labor Indirect materials Indirect labor Utilities Maintenance Fixed costs Salaries Depreciation Property taxes Insurance Janitorial Total costs Everyday Company Fabricating Department Responsibility Costs Report For the Month of January 2020 Static 176,250 Budgeted $ 264,375 881,250 10,575 17,625 17,625 10,575 63,000 25,200 3,750 1,800 1.950 $1,297,725 Actual 150,000 Actual $ 270,000 825,000 10,650 17,738 16,050 8,850 72,000 25,200 3,750 1,800 1,950 $1,252,988 Required: (a) Prepare a correct responsibility report for fabricating department in January, assuming all variable costs, 40% of salaries and 60% of janitorial costs are controllable by the department manager. Do you agree with Mr. Chan's self-performance evaluation? (12 marks) (b) Suggest the opportunities that the fabricating department (a cost center within the production department) should explore for improving their performance. (5 marks)

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a Production units Variable costs Direct materials Direct labor Indirect materials Indirect labor Ut... View the full answer