Problem 22-6A (Part Level Submission) Manufacturing Overhead Actual Budget $73,0
ID: 2531267 • Letter: P
Question
Problem 22-6A (Part Level Submission)
Manufacturing Overhead
Actual
Budget
$73,000
$69,700
48,100
46,000
21,000
17,600
20,100
16,500
22,200
19,500
$184,400
$169,300
Vice President
Actual
Budget
(a1)
To Cutting Department Manager—Seattle Division
Month: January
Controllable Costs:
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Total
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(a2)
To Division Production Manager—Seattle
Month: January
Controllable Costs:
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Total
LINK TO TEXT
(a3)
To Vice President—Production
Month: January
Controllable Costs:
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Total
Problem 22-6A (Part Level Submission)
Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager 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 finance. All vice presidents report to the president.In January 2017, 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—Seattle Indirect labor$73,000
$69,700
Indirect materials48,100
46,000
Maintenance21,000
17,600
Utilities20,100
16,500
Supervision22,200
19,500
$184,400
$169,300
Total costs Shaping Department—Seattle $158,400 $148,400 Finishing Department—Seattle 210,500 204,100 Denver division 677,900 673,400 San Diego division 722,500 715,400Additional overhead costs were incurred as follows: Seattle division production manager—actual costs $52,200, budget $50,800; vice president of production—actual costs $65,500, budget $64,100; president—actual costs $76,300, budget $73,900. These expenses are not allocated.
The vice presidents who report to the president, other than the vice president of production, had the following expenses.
Vice President
Actual
Budget
Marketing $134,100 $129,500 Finance 108,600 104,600Explanation / Answer
To Cutting Department Manager: Seattle Division :
To Division Production Manager : Seattle
To Vice-President - Production:
Controllable Costs Budget Actual Favorable / Unfavorable / Neither Favorable Nor Unfavorable Indirect Labor $ 69,700 $ 73,000 $ 3,300 Unfavorable Indirect Materials 46,000 48,100 2,100 Unfavorable Maintenance 17,600 21,000 3,400 Unfavorable Utilities 16,500 20,100 3,600 Unfavorable Supervision 19,500 22,200 2,700 Unfavorable Totals 169,300 184,400 15,100 UnfavorableRelated Questions
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