P22-6C Venue Company uses a responsibility reporting system. It has divisions in
ID: 2477925 • Letter: P
Question
P22-6C Venue Company uses a responsibility reporting system. It has divisions in San Prepare reports for cost Francisco, New York, and Tulsa. Each division has three production departments: Cut enters under responsibility ting, Shaping, and Finishing. The responsibility for each department rests with a man accounting, and comment on ager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finan.O 4) All vice presidents report to the president. manager reports to performance of managers In January 2014, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below. Manufacturing Overhead Actual Budget Individual costs- Cutting Department-New York Indirect labor Indirect materials Maintenance Utilities Supervision $ 95,000 90,000 61,000 25,000 20,000 28,000 224,000 62,500 27,400 25,200 30,000 $240,100 Total costs Shaping Department-New York Finishing Department-New York San Francisco division Tulsa division $190,000 249,000 722,000 760,000 $177,000 246,000 715,000 750,000 Additional overhead costs were incurred as follows: New York division production manager-actual costs $73,100, budget $70,000; vice president of production-actualExplanation / Answer
a1. Manufacturing overhead - cutting department manager of the New York division:
2. Manufacturing overhead - NY division manager:
3. Manufacturing overhead - vice president of production.
4. Manufacturing overhead and expenses - president.
b1. In the New York division, the cutting department has the highest unfavorable variance of $16,100 and the finishing department has the least unfavorable variance of $3,000. Shaping department lies in the middle with an unfavorable variance of $13,000.
2. In terms of division managers, New York has the highest unfavorable variance of $35,200 and San Francisco has the least unfavorable variance of $7,000. Tulsa lies in between with an unfavorable variance of $10,000.
3. In terms of vice presidents, the vice president of finance has the highest unfavorable variance of $60,100. The vice president of marketing has the least unfavorable variance of $4,900. Vice president of production lies in between with an unfavorable variance of $55,200.
Costs: Budgeted Actual Difference Favorable/Unfavorable Indirect labor 90,000 95,000 (5,000) Unfavorable Indirect materials 61,000 62,500 (1,500) Unfavorable Maintenance 25,000 27,400 (2,400) Unfavorable Utilities 20,000 25,200 (5,200) Unfavorable Supervision 28,000 30,000 (2,000) Unfavorable Total 224,000 240,100 (16,100) UnfavorableRelated Questions
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