Questions 1. Using budget data, how many motors would have to be sold for Waltham Motors Division to break even? 2. Using budget data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) was allocated to planned production? What was the actual per unit cost of production and shipping? 3. Comment on the performance report and the plant accountant's analysis of results. How, if at all, would you suggest the performance report be changed before sending it on to the division manager and Marco Corporation headquarters? 4. Prepare your own analysis of the Waltham Division's operations in May. Explain in as much detail as possible why income differed from what you would have expected. 2 Waltham Motors Division 154-169 Exhibit1 Performance Report, May 2004 Actual Budget 000 $864.000 14.000 $686,000 Variance 4,000 $178,000 U $108,000 288,000 57,600 14.400 10.800 5.200 $484.000 28.800 $512.800 $351,200 Units Sales Variable manufacturing costs Direct material Direct labor Indirect labor Idle time Cleanup time Miscellaneous supplies Total variable manufacturing cost Variable shipping costs Total variable costs Contribution margin Nonvaniable manufacturing costs Supervision Rent Depreciation Other Total nonvariable manufacturing costs Selling and administrative costs Total nonvariable and programmed costs Operating income foss) $ 85,400 246,000 44.400 14.200 10.000 4.000 $404,000 $28.000 $432,000 $254.000 $ 22,600 42.000 13,200 200 800 1.200 $ 80.000 5 800 $ 80,800 $ 97,200 F F F F F F F F F U $ 1.200 U $ 57,600 20.000 60.000 10.400 $148.000 $ 58,800 20.000 60,000 10.400 $149,200 $ 1.200 U 112.000 112.000 $260.000 U $261,200 (7.200) $ 1.200 (98.400) 91 200 U