Using responsibility reports to evaluate cost, revenue, and profit centersThe accountant for a subunit of Speed Sports Company went on vacation before completing the subunit’s monthly responsibility report. This is as far as she got:RequirementsComplete the responsibility report for this subunit.Based on the data presented, what type of responsibility center is this Subunit.Which items should be investigated if part of management’s decision criteria is to investigate all variances exceeding $12,000? Speed-Subunit XRevenLe by ProductDownhill-RIFlexible BudgetActualResultsFlexibleBudgetSales VolumeVarianceStaticBudgetVariance(a)$ 321,000151,000$ 17,000 F(d)(b)$ 295,000145,000Downh Il-RII()$ 161,000285,000$ 3,000 U288,000(e)303,000Cross-EXICross-EXII259,000(1)255,00016,500 U271,500425,0002,000 F(h)404,000Snow-LXITotal(g)$ 1,441,000(k)$ 1,418,500

1) Actual expense result < flexible budget expense; variance = Favourable (F) Actual expense…

Speed-Subunit X RevenLe by Product Downhill-RI Flexible Budget Actual Results Flexible Budget Sales Volume Variance Static Budget Variance (a) $ 321,000 151,000 $ 17,000 F (d) (b) $ 295,000 145,000 Downh Il-RII () $ 161,000 285,000 $ 3,000 U 288,000 (e) 303,000 Cross-EXI Cross-EXII 259,000 (1) 255,000 16,500 U 271,500 425,000 2,000 F (h) 404,000 Snow-LXI Total (g) $ 1,441,000 (k) $ 1,418,500

Speed-Subunit X RevenLe by Product Downhill-RI Flexible Budget Actual Results Flexible Budget Sales Volume Variance Static Budget Variance (a) $ 321,000 151,000 $ 17,000 F (d) (b) $ 295,000 145,000 Downh Il-RII () $ 161,000 285,000 $ 3,000 U 288,000 (e) 303,000 Cross-EXI Cross-EXII 259,000 (1) 255,000 16,500 U 271,500 425,000 2,000 F (h) 404,000 Snow-LXI Total (g) $ 1,441,000 (k) $ 1,418,500

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 7CE: Refer to Cornerstone Exercise 8.6. Required: 1. Calculate the total budgeted cost of units produced...

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