Northampton Plastics uses a responsibility reporting system. It has divisions in Cambridge, Bedford, and Fulbourn. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president. In January 2020, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below.

Additional overhead costs were incurred as follows: Bedford division production manager—actual costs £52,500, budget £51,000; vice president of production—actual costs £65,000, budget £64,000; president—actual costs £76,400, budget £74,200. These expenses are not allocated.

The vice presidents who report to the president, other than the vice president of production, had the following expenses.

Instructions

a. Using the format in Illustration 25.19, prepare the following responsibility reports.

1. Manufacturing overhead—Cutting Department manager—Bedford division.

2. Manufacturing overhead—Bedford division manager.

3. Manufacturing overhead—vice president of production.

4. Manufacturing overhead and expenses—president.

b. Comment on the comparative performances of:

1. Department managers in the Bedford division.

2. Division managers.

3. Vice presidents.

Transcribed Image Text:

Actual Manufacturing Overhead Budget Individual costs-Cutting Department-Bedford £ 73,000 £ 70,000 Indirect labor Indirect materials 47,900 46,000 Maintenance 20,500 18,000 Utilities 20,100 17,000 Supervision 20,000 22,000 £183,500 £171,000 Total costs Shaping Department-Bedford Finishing Department-Bedford Cambridge division £158,000 £148,000 210,000 205,000 673,000 678,000 Fulbourn division 722,000 715,000 Vice President Actual Budget Marketing £133,600 £130,000 Finance 109,000 104,000