Is Cost Control Report For the Month Ended June 30 40,000 S 76,000 $1,980u utili

Question

Is Cost Control Report For the Month Ended June 30 40,000 S 76,000 $1,980u utilities Supervision Depreciation Total 23,800 23,400 21,100 46,000 22,000 1,800U 28,980 2,500 U 19,700 1,400 U 46,000 7,800 269,208 $261,600 $7,600 I just can't understand all of these unfavorable variances," Weston complained to the supervisor of another department. "When the boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that it might be over the supplies that were stolen out of our warehouse last month. But they only amounted to a couple of hundred dolars, and just look at this report Everything is unfavorable. Direct labor wages and supplies are variable costs; supervision and depreclation are fixed costs; and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $14,100; the fixed component of the budgeted utilities cost bs $13.300. Required: 2 Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining department (Round your Intermedlate calculations to 2 decimal places. Indicate the effect of each varlance by selecting "F for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero varlance). Input all amounts as posltive values.)

Explanation / Answer

Freemont Corporation - Machining Department Flexible Budget Performance Report For the Month Ended June 30 Actual results Spending Variance Flexible Budget Activity Variance Planning Budget Machine Hours      42,000.00      42,000.00      40,000.00 Direct Labor Wages      77,900.00     1,900.00 (F)      79,800.00    3,800.00 (U)      76,000.00 Supplies      23,800.00         700.00 (U)      23,100.00    1,100.00 (U)      22,000.00 Maintenance      23,400.00     2,160.00 (U)      21,240.00       340.00 (U)      20,900.00 Utilities      21,100.00     1,080.00 (U)      20,020.00       320.00 (U)      19,700.00 Supervision      46,000.00                  -        46,000.00                 -        46,000.00 Depreciation      77,000.00                  -        77,000.00                 -        77,000.00 Total    269,200.00     2,040.00 (U)    267,160.00    5,560.00 (U)    261,600.00 Flexible Budget: Direct Labor Wages = $76,000 X (42,000 / 40,000) = $79,800 Supplies = $22,000 X (42,000 / 40,000) = $23,100 Maintenance Cost = $14,100 + ($6,800 X 42,000 / 40,000) = $21,240 Utilities Cost = $13,300 + ($6,400 X 42,000 / 40,000) = $20,020

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