Frank Weston, supervisor of the Freemont Corporation\'s Machining Department, wa

Question

Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly upset after being reprimanded for his department's poor performance over the prior month. The de partment's cost control report is given below Cost Control Report For the Month Ended June 30 Actual Machine-hours 42,000 48,800 Direct labor wages Supplies Maintenance Utilities Supervision Depreciation Total 29,300 25,660 23,300 57,000 99,800 326,40e 92,28089,200 $3,0 u 26,480 2,900 U 23,3e0 2,30 U 21,900 1,480 u 57,000 99,080 $316,880 $9,600 U "I just can't understand all of these unfavorable variances,"Weston complained to the supervisor of another department. "When the boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that it might be over the supplies that were stolen out of our warehouse last month. But they only amounted to a couple of hundred dollars, and just look at this report Everything is unfavorable. Direct labor wages and supplies are variable costs; supervision and depreciation are fixed costs and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $18,500; the fixed component of the budgeted utlities cost is $14,400. Required: 2 Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the m achining dep partment (Round your intermediate calculations to 2 decimal places, 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 Flexible Budget PerformanceR For the Month Ended June 30 Planning Flexible Bud Actual 39 92,200 Direct labor wages

Explanation / Answer

Actual Revenue and spending variances Flexible budget Activity variances Planning budget Machine hours 42000 42000 40000 Direct labor wages 92200 1460 U 93660 4460 U 89200 Supplies 29300 1580 U 27720 1320 U 26400 Maintenance 25600 2060 U 23540 240 U 23300 Utilities 23300 920 U 22380 480 U 21900 Supervision 57000 0 None 57000 0 None 57000 Depreciation 99000 0 None 99000 0 None 99000 Total 326400 3100 U 323300 6500 U 316800

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