Problem 1:

Budget Performance Reports for Cost Centers

Partially completed budget performance reports for Delmar Company, a manufacturer of light duty motors, follow:

Delmar Company Budget Performance ReportVice President, Production For the Month Ended June 30
Plant	Actual	Budget	Over Budget	(Under) Budget
Eastern Region	$528,000	$528,000		$0
Central Region	376,400	380,200		(3,800)
Western Region	(g)	(h)	(i)
	$(j)	$(k)	$(l)	$(3,800)

Delmar Company Budget Performance ReportManager, Western Region Plant For the Month Ended June 30
Department	Actual	Budget	Over Budget	(Under) Budget
Chip Fabrication	$(a)	$(b)	$(c)
Electronic Assembly	77,470	76,480	990
Final Assembly	120,630	121,600		$(970)
	$(d)	$(e)	$(f)	$(970)

Delmar Company Budget Performance ReportSupervisor, Chip Fabrication For the Month Ended June 30
Cost	Actual	Budget	Over Budget	(Under) Budget
Factory wages	$29,960	$28,000	$1,960
Materials	71,610	72,110		$(500)
Power and light	4,410	3,710	700
Maintenance	8,870	8,100	770
	$114,850	$111,920	$3,430	$(500)

Problem 2:

Problem 3:

Problem 4:

Problem 5:

a. Complete the budget performance reports by determining the correct amounts for the lettered spaces (a-I) as marked above. a. \$ g. \$ b. \$ h. \$ c. \$ i. \$ d. \$ j. \$ e. $ k. \$ f. \$ I. $ b. Complete the following memo to Randi Wilkes, vice president of production for Delmar Company, explaining the performance of the production division for June. MEMO To: Randi Wilkes, Vice President of Production The plant has experienced a budget overrun. Its budget reveals that the Department caused the majority of the budget overrun. The supervisor of the Department should investigate the reasons for the budget overruns in Cost Drivers for Support Department Allocations For each of the following support departments, select the cost driver listed that is most appropriate for allocating support department costs to responsible units. Your answer should include the number of the cost driver only. Cost drivers to choose from: 1. Number of conference attendees 2. Number of computers 3. Number of employees trained 4. Number of cell phone minutes used 5. Number of sales invoices 6. Number of purchase requisitions 7. Number of travel claims 8. Number of data analysis requests Cost Department Allocations In divisional income statements prepared for Demopolis Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $50,580, and the Purchasing Department had expenses of $23,320 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records: Required: a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division. b. Using the cost driver information in (a), determine the annual amount of payroll and purchasing costs allocated to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. Do not round interim calculations. Round your answers to two decimal places. Support department allocation rates: Payroll Department $ per distribution Purchasing Department $ per requisition c. Residential's support department allocations are than the other two divisions because Residential is a user of support department services. Residential has many employees on a weekly payroll, which translates into a number of payroll transactions. Divisional income statements with support department allocations Horton Technology has two divisions, Consumer and Commercial, and two corporate support departments, Tech Services and Purchasing. The corporate expenses for the year ended December 31, 20Y7, are as follows: The other corporate administrative expenses include officers' salaries and other expenses required by the corporation. The Tech Services Department allocates costs to the divisions based on the number of computers in the department, and the Purchasing Department allocates costs to the divisions based on the number of purchase orders for each department. The services used by the two divisions are as follows: The support department allocations of the Tech Services Department and the Purchasing Department are considered controllable by the divisions. Corporate administrative expenses are not considered controllable by the divisions. The revenues, cost of goods sold, and operating expenses for the two divisions are as follows: Prepare the divisional income statements for the two divisions. Do not round your interim calculations. Horton Technology Divisional Income Statements For the Year Ended December 31, 20 Y7 \begin{tabular}{|c|c|c|} \hline \multirow{2}{*}{ Line Item Description } & \begin{tabular}{l} Consumer \\ Division \end{tabular} & \begin{tabular}{c} Commercial \\ Division \end{tabular} \\ \hline & & \\ \hline & $[ & $ \\ \hline & & \\ \hline & $ & $ \\ \hline & & \\ \hline Operating income before support department allocations & $[ & $ \\ \hline Support department allocations: & & \\ \hline & $ & $ \\ \hline & & \\ \hline Total support department allocations & $ & $ \\ \hline & $ & $ \\ \hline \end{tabular} Return on investment The operating income and the amount of invested assets in each division of Stewart Industries are as follows: a. Compute the return on investment for each division. (Round to the nearest whole percentage.) b. Which division is the most profitable per dollar invested