Arctica manufactures snowmobiles and ATVs. These products are made in different

Question

Arctica manufactures snowmobiles and ATVs. These products are made in different departments, and each department has its own manager. Each responsibility performance report only includes those costs that the particular department manager can control: raw materials, wages, supplies used, and equipment depreciation.

Prepare a responsibility accounting report for the snowmobile department. (Under budget amounts should be indicated by a minus sign.)

Budget Actual Snowmobile ATV Combined Snowmobile ATV Combined Raw materials $ 21,300 $ 29,300 $ 50,600 $ 21,220 $ 30,620 $ 51,840 Employee wages 12,200 22,300 34,500 12,640 23,040 35,680 Dept. manager salary 6,100 7,000 13,100 6,200 6,200 12,400 Supplies used 5,280 2,700 7,980 4,970 2,720 7,690 Depreciation-Equip. 7,800 14,300 22,100 7,800 14,300 22,100 Utilities 540 720 1,260 510 680 1,190 Rent 7,500 8,100 15,600 7,100 8,100 15,200 Totals $ 60,720 $ 84,420 $ 145,140 $ 60,440 $ 85,660 $ 146,100

Explanation / Answer

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Controllable Cost Budget Actual Over/(under) Budget Raw Materials 21300 21220 -80 Wages 12200 12640 440 Supplies 5280 4970 -310 Equipment Dep 7800 7800 0 Total 46580 46630 50

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