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Chapter 9 Homework

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Item 15

Item 15 2 points

Billie Whitehorse, the plant manager of Travel Frees Indiana plant, is responsible for all of that plants costs other than her own salary. The plant has two operating departments and one service department. The camper and trailer operating departments manufacture different products and have their own managers. The office department, which Whitehorse also manages, provides services equally to the two operating departments. A budget is prepared for each operating department and the office department. The companys responsibility accounting system must assemble information to present budgeted and actual costs in performance reports for each operating department manager and the plant manager. Each performance report includes only those costs that a particular operating department manager can control: raw materials, wages, supplies used, and equipment depreciation. The plant manager is responsible for the department managers salaries, utilities, building rent, office salaries other than her own, and other office costs plus all costs controlled by the two operating department managers. The annual departmental budgets and actual costs for the two operating departments follow.

	Budget										Actual
	Campers			Trailers			Combined			Campers			Trailers			Combined
Raw materials	$	196,000		$	277,000		$	473,000		$	194,400		$	273,600		$	468,000
Employee wages		105,300			206,200			311,500			107,400			208,000			315,400
Dept. manager salary		43,500			52,200			95,700			44,000			53,400			97,400
Supplies used		34,400			91,800			126,200			32,900			91,300			124,200
DepreciationEquip.		61,500			126,000			187,500			61,200			126,500			187,700
Utilities		4,000			5,600			9,600			3,300			5,300			8,600
Building rent		6,600			10,100			16,700			6,100			9,100			15,200
Office department costs		68,750			68,750			137,500			83,550			83,550			167,100
Totals	$	520,050		$	837,650		$	1,357,700		$	532,850		$	850,750		$	1,383,600

The office departments annual budget and its actual costs follow.

	Budget			Actual
Plant manager salary	$	87,000		$	86,000
Other office salaries		42,500			26,900
Other office costs		8,000			54,200
Totals	$	137,500		$	167,100

Required: 1. Prepare responsibility accounting performance reports that list costs controlled by the following. a. Manager of the Camper department. b. Manager of the Trailer department. c. Manager of the Indiana plant. In each report, include the budgeted and actual costs and show the amount that each actual cost is over or under the budgeted

Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Prepare responsibility accounting performance reports that list controllable costs. In each report, include the budgeted and actual costs and show the amount that each actual cost is over or under the budgeted amount for manager of the Camper department. (Under budget amounts should be indicated by a minus sign.) Responsibility Accounting Performance Report Dept. Manager, Camper Department For the Year Over (Under) Budget Budgeted Amount Actual Amount Controllable Costs 0 0 Totals $ Req 1A Req 1B