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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 th information being generated by the system. A report for the company's Assembly Department for the month of March follows: Assembly Department Cost Report For the Month Ended March 31 Actual Results. Planning Budget 20,000 Variances 15,000 Machine-hours. Variable costs: Supplies $ 9,900 $ 9,300 32,200 $ 600 F 2,300 F Scrap 34,500 Indirect materials. 93,800 111,000 17,200 F Fixed costs: Wages and salaries. 77,500 103,000 73,000 103,000 4,500 U 0 Equipment depreciation Total cost $ 315,800 $ 331,400 $ 15,600 F 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: 1. The company's president is uneasy about the cost reports, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. 4. Were costs well controlled in March?

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 th information being generated by the system. A report for the company's Assembly Department for the month of March follows: Assembly Department Cost Report For the Month Ended March 31 Actual Results. Planning Budget 20,000 Variances 15,000 Machine-hours. Variable costs: Supplies $ 9,900 $ 9,300 32,200 $ 600 F 2,300 F Scrap 34,500 Indirect materials. 93,800 111,000 17,200 F Fixed costs: Wages and salaries. 77,500 103,000 73,000 103,000 4,500 U 0 Equipment depreciation Total cost $ 315,800 $ 331,400 $ 15,600 F 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: 1. The company's president is uneasy about the cost reports, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. 4. Were costs well controlled in March?

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter19: Support Department And Joint Cost Allocation
Section: Chapter Questions
Problem 2CMA: Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing...
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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 report for the company's Assembly Department for the month of March follows: Assembly Department Cost Report For the Month Ended March 31 Actual Results Planning Budget 20,000 Variances 15,000 Machine-hours Variable costs: Supplies $ 9,900 $ 600 F $ 9,300 32,200 Scrap 34,500 2,300 F Indirect materials 93,800 111,000 17,200 F Fixed costs: Wages and salaries Equipment depreciation 77,500 103,000 73,000 103,000 4,500 U 0 Total cost $ 315,800 $ 331,400 $ 15,600 F 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: 1. The company's president is uneasy about the cost reports, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. 4. Were costs well controlled in March?
Transcribed Image Text: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 report for the company's Assembly Department for the month of March follows: Assembly Department Cost Report For the Month Ended March 31 Actual Results Planning Budget 20,000 Variances 15,000 Machine-hours Variable costs: Supplies $ 9,900 $ 600 F $ 9,300 32,200 Scrap 34,500 2,300 F Indirect materials 93,800 111,000 17,200 F Fixed costs: Wages and salaries Equipment depreciation 77,500 103,000 73,000 103,000 4,500 U 0 Total cost $ 315,800 $ 331,400 $ 15,600 F 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: 1. The company's president is uneasy about the cost reports, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. 4. Were costs well controlled in March?
Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (Do not round your intermediate calculations. 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.) Westmont Corporation Assembly Department Flexible Budget Performance Report Actual Results For the Month Ended March 31 Revenue and Spending Flexible Variances Budget Activity Variances Planning Budget Machine-hours (q) Supplies $ $ Scrap Indirect materials Wages and salaries Equipment depreciation Total < Required 2 15,000 9,300 32,200 93,800 77,500 103,000 $ 315,800 Required 4 > 20,000 9,900 34,500 111,000 73,000 103,000 $ 331,400
Transcribed Image Text:Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (Do not round your intermediate calculations. 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.) Westmont Corporation Assembly Department Flexible Budget Performance Report Actual Results For the Month Ended March 31 Revenue and Spending Flexible Variances Budget Activity Variances Planning Budget Machine-hours (q) Supplies $ $ Scrap Indirect materials Wages and salaries Equipment depreciation Total < Required 2 15,000 9,300 32,200 93,800 77,500 103,000 $ 315,800 Required 4 > 20,000 9,900 34,500 111,000 73,000 103,000 $ 331,400
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