Berwin Inc. is a small industrial equipment manufacturer with approximately $3.5 million in annual sales. Berwin can always compete with other small appliance manufacturers. However, the market expands only when there is product innovation. The following is information on Berwin Inc's performance report:

Required:

1. Compute and analyze if the variance is favorable or unfavorable!?

2. Identify the strengths and weaknesses of the performance report and give your explanation!

3. How should the report be revised to eliminate these weaknesses? Explain!

Transcribed Image Text:

Berwin Inc. Machinery Department Performance Report For The Year Ended May 31, 2019 Budget Actual Variance Volume in unit 3,000 3,185 Variable manufacturing costs: Direct materials 2$ 24,000 $ 24,843 Direct Labor 27,750 $ 29,302 Variable Overhead $ 33,300 $ 35,035 Total variable costs 85,050 $ 89,180 Fixed manufacturing costs: Indirect Labor 3,300 $ 3,334 Depreciation 2$ 1,500 $ 1,500 2$ 300 $ 240 $ Таx 300 Insurance 240 Others 930 $ 1,027 Total fixed costs $ 6,270 $ 6,401 Company Costs: Research and development 2$ 2,400 $ 3,600 $ 3,728 Selling and administrative Total company costs 4,075 6,000 $ 97,320 $ 7,803 Total costs 103,384 Berwin Inc. Machinery Department Performance Report For The Year Ended May 31, 2019 Budget Actual Variance Volume in unit 3,000 3,185 Variable manufacturing costs: Direct materials 2$ 24,000 $ 24,843 Direct Labor 27,750 $ 29,302 Variable Overhead $ 33,300 $ 35,035 Total variable costs 85,050 $ 89,180 Fixed manufacturing costs: Indirect Labor 3,300 $ 3,334 Depreciation 2$ 1,500 $ 1,500 2$ 300 $ 240 $ Таx 300 Insurance 240 Others 930 $ 1,027 Total fixed costs $ 6,270 $ 6,401 Company Costs: Research and development 2$ 2,400 $ 3,600 $ 3,728 Selling and administrative Total company costs 4,075 6,000 $ 97,320 $ 7,803 Total costs 103,384

Answer rating: 100% (QA)

Solution Berwin inc is a Small indusbrial eauipment manufacturer wit... View the full answer