Amarillo Corporation has four divisions: the assembly division, the processing division, the machining division, and the packing division. All four divisions are under the control of the vice president of manufacturing. Each division has a manager and several departments that are directed by supervisors. The chain of command runs downward from vice president to division manager to supervisor. The processing division is composed of the paint and finishing departments. The May responsibility reports for the supervisors of these departments follow:

Other pertinent cost data for May follow:
Budgeted* Actual
Cost data of other divisions
Assembly ..................................................$760,000..................... $748,600
Machining................................................... 580,000....................... 592,800
Packing...................................................... 829,900....................... 811,400
Other costs associated with
Processing division manager.............................. 440,000....................... 435,600
Vice president of manufacturing.......................... 256,000....................... 266,120
*Amarillo uses flexible budgets for performance evaluation.
Required
a. Prepare a responsibility report for the manager of the processing division.
b. Prepare a responsibility report for the vice president of manufacturing.
c. Explain where the $12,600 unfavorable labor variance in the paint department supervisor's report is included in the vice president's report.
d. Based on the responsibility report prepared in Requirement a, explain where the processing division manager should concentrate his attention.

Budgeted Actual Varlance Palnt Department Controllable costs Raw materials Labor Repairs Maintenance $84,000 115,400 9,600 5,200 $214,200 $86,000 128,000 7,740 4,920 $ 2,000 U 12,600 U 1,860 F 280 F Total $226660$12460U FInlshing Department Controllable costs Raw materials Labor Repairs Maintenance 60,000 86,600 5,660 3,360 $155,620 58,000 79,800 6,340 4,100 $148,240 $2,000 F 6,800 F 680 U 740 U 7,380 F Total Amarillo uses flexible budgets for performance evaluation.