Several years ago, Westmont Corporation developed a comprehensive budgeting system for planning and control purposes. While...
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Several years ago, Westmont Corporation developed a comprehensive budgeting system for planning and control purposes. While departmental supervisors have been happy with the system, the factory manager has expressed considerable dissatisfaction with the information being generated by the system. A report for the company's Assembly Department for the month of March follows: Machine-hours Variable costs: Supplies Scrap Indirect materials Fixed costs: Wages and salaries Equipment depreciation Total cost Assembly Department Cost Report For the Month Ended March 31 Actual Results 25,800 $ 7,800 25,200 75,800 Planning Budget 30,000 $ 8,400 27,000 88,500 Variances 68,000 98,000 $ 600 F 1,800 F 12,700 F 71,500 98,000 $ 278,300 $ 289,900 $ 11,600 F 3,500 U 0 After receiving a copy of this cost report, the supervisor of the Assembly Department stated. "These reports are super. It makes me feel really good to see how well things are going in my department. I can't understand why those people upstairs complain so much about the reports." For the last several years, the company's marketing department has chronically failed to meet the sales goals expressed in the company's monthly budgets. Required: 1. The company's president is uneasy about the cost reports, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. 4. Were costs well controlled in March? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Machine-hours (q) Supplies Scrap Indirect materials Wages and salaries Equipment depreciation Total Actual Results Westmont Corporation Assembly Department Flexible Budget Performance Report For the Month Ended March 31 25,000 S 7,800 25,200 75,800 71,500 98,000 $ 278,300 Revenue and Spending Variances U U U U None < Required 2 Flexible Budget Activity Variances Required 4 > F F F None None Planning Budget $ 30,000 8,400 27,000 88,500 68,000 98,000 $ 289,900 Several years ago, Westmont Corporation developed a comprehensive budgeting system for planning and control purposes. While departmental supervisors have been happy with the system, the factory manager has expressed considerable dissatisfaction with the information being generated by the system. A report for the company's Assembly Department for the month of March follows: Machine-hours Variable costs: Supplies Scrap Indirect materials Fixed costs: Wages and salaries Equipment depreciation Total cost Assembly Department Cost Report For the Month Ended March 31 Actual Results 25,800 $ 7,800 25,200 75,800 Planning Budget 30,000 $ 8,400 27,000 88,500 Variances 68,000 98,000 $ 600 F 1,800 F 12,700 F 71,500 98,000 $ 278,300 $ 289,900 $ 11,600 F 3,500 U 0 After receiving a copy of this cost report, the supervisor of the Assembly Department stated. "These reports are super. It makes me feel really good to see how well things are going in my department. I can't understand why those people upstairs complain so much about the reports." For the last several years, the company's marketing department has chronically failed to meet the sales goals expressed in the company's monthly budgets. Required: 1. The company's president is uneasy about the cost reports, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. 4. Were costs well controlled in March? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Machine-hours (q) Supplies Scrap Indirect materials Wages and salaries Equipment depreciation Total Actual Results Westmont Corporation Assembly Department Flexible Budget Performance Report For the Month Ended March 31 25,000 S 7,800 25,200 75,800 71,500 98,000 $ 278,300 Revenue and Spending Variances U U U U None < Required 2 Flexible Budget Activity Variances Required 4 > F F F None None Planning Budget $ 30,000 8,400 27,000 88,500 68,000 98,000 $ 289,900
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Variance analysis is the analysis drawn on comparing the budgeted costs with actual co... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0078111006
14th edition
Authors: Ray Garrison, Eric Noreen and Peter Brewer
Posted Date:
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