Several years ago, Westmont Corporation developed a comprehensive budgeting syst
ID: 2556832 • Letter: S
Question
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 typical departmental cost report for a recent period follows:
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:
Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (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.)
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 typical departmental cost report for a recent period follows:
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.
Assembly Department Cost Report For the Month Ended March 31 Actual Planning Results Budget Variances Machine-hours Variable costs: 15,000 20,000 $ 9,600 10,200 600 F Supplies Scrap Indirect materials 33,600 36,000 2,400 F 97,400 115,500 18,100 F Fixed costs: Wages and salaries Equipment depreciation 78,700 74,000 4,700 U 104,000 104,000 Total cost $ 323,300 $339,700 $ 16,400 FExplanation / Answer
Complete the new performance report for the quarter, based on Flexible Budget Performance approach.
Actual results Spending variance Flexible budget Activity variance Planning budget Machine hour (Q) 15000 15000 20000 Supplies 9600 1950 U 7650 2550 F 10200 Scrap 33600 6600 U 27000 9000 F 36000 Indirect materials 97400 10775 U 86625 28875 F 115500 Wages and salaries 78700 4700 U 74000 None 74000 Equipment depreciation 104000 None 104000 None 104000 Total 323300 24025 U 299275 40425 F 339700Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.