Billie Whitehorse, the plant manager of Travel Free\'s Indiana plant, is respons

Question

Billie Whitehorse, the plant manager of Travel Free's Indiana plant, is responsible for all of that plant's costs other than her own salary. The plant has two operating departments and one service department. The camper and trailer operating departments manufacture different products and have their own managers. The office department, which Whitehorse also manages, provides services equally to the two operating departments. A budget is prepared for each operating department and the office department. The company's responsibility accounting system must assemble information to present budgeted and actual costs in performance reports for each operating department manager and the plant manager. Each performance report includes only those costs that a particular operating department manager can control raw materials, wages, supplies used, and equipment depreciation. The plant manager is responsible for the department managers' salaries, utilities, building rent, office salaries other than her own, and other office costs plus all costs controlled by the two operating department managers. The annual departmental budgets and actual costs for the two operating departments follow. Campers Trailers Combined Campers Trailers Combined $196,000 $277,000 $ 473,000 $195,000 $274,400 $ 469,400 313,800 Raw materials Employee wages Dept. manager salary Supplies u Depreciation-Equip. 104,300 205,600 52,200 34,400 92,600 61,500 125,500 106,800 207,000 43,200 124,800 188,300 61,800 26,500 Building rent Office department costs 9,200 65,750 14,900 139,100 65,750 131,500 69,550 69,550 $ 515,250 $833,450 1,348,700 $519,850 $836,950 1,356,800 The office department's annual budget and its actual costs follow. Plant manager salary Other office salaries Other office costs $86,000 89,000 38,500 $131,500 $139,100

Explanation / Answer

a) Responsibiity Accounting Performance Report Department Manager, Camper Department For the year Budgeted Amount Actual Amount Over (Under) Budget Controllable costs: Raw materials $           196,000 $          195,000 $               (1,000) Employee wages $           104,300 $          106,800 $                 2,500 Supplies used $             34,400 $             33,200 $               (1,200) Depreciation equipment $             61,500 $             61,800 $                     300 TOTAL $           396,200 $          396,800 $                     600 b) Responsibiity Accounting Performance Report Department Manager, Trailer Department For the year Budgeted Amount Actual Amount Over (Under) Budget Controllable costs: Raw materials $           277,000 $          274,400 $               (2,600) Employee wages $           205,600 $          207,000 $                 1,400 Supplies used $             92,600 $             91,600 $               (1,000) Depreciation equipment $           125,500 $          126,500 $                 1,000 TOTAL $           700,700 $          699,500 $               (1,200) c) Responsibiity Accounting Performance Report Plant Manager, Indiana Plant For the year Budgeted Amount Actual Amount Over (Under) Budget Controllable costs: Department Manager salary $             95,400 $             97,900 $                 2,500 Utilities $             10,000 $               8,600 $               (1,400) Building rent $             14,900 $             14,900 $                        -   Other office salaries $             38,500 $             26,900 $             (11,600) Other office costs $                7,000 $             23,200 $               16,200 Camper department $           396,200 $          396,800 $                     600 Trailer department $           700,700 $          699,500 $               (1,200) TOTAL $       1,262,700 $       1,267,800 $                 5,100

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