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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Budget performance report for a cost center

 Valotic Tech Inc. sells electronics over the Internet. The Consumer Products Division is organized as a cost center. The budget for the (Consumer Products Division for the month ended January 31 is as follows (in thousands):

Customer service salaries $ 546.840
Insurance and property taxes 114,660
Distribution salaries 872340
Marketing salaries 1,028370
Engineer salaries 836.850
Warehouse wages 586,110
Equipment depreciation 183,792
Total $4,168,962

 During January, the costs incurred in the (Consumer Products Division were as follows:

Customer service salaries $ 602,350
Insurance and property taxes 110,240
Distribution salaries 861,200
Marketing salaries 1,085,230
Engineer salaries 820,008
Warehouse wages 562.632
Equipment depreciation 183,610
Total $4,225,270

 Instructions

  1. 1. Prepare a budget performance report for the director of the Consumer Products Division for the month of January.
  2. 2. For which costs might the director be expected to request supplemental reports?

(1)

To determine

Budget performance report: This is a report which compares, enumerates, and reports the difference between the actual costs and the estimated or planned costs. If the actual costs are more than the estimated costs, the difference is reported as over budget. If the actual costs are less than the estimated costs, the difference is reported as under budget.

To prepare: Budget performance report for the director of CP Division, for the month of January

Explanation

Prepare budget performance report for the director of CP Division, for the month of January.

Incorporation VT
Budget Performance Report-Director CP Division
For the Month Ended January 31
  Actual ($) Budget ($) Over Budget ($) Under Budget ($)
Customer service salaries $602,350 $546,840 $55,510  
Insurance and property taxes 112,240 114,660   $(4,420)
Distribution salaries 861,200 872,340   (11,140) ...

(2)

To determine

To indicate: The costs which the director requires supplemental reports

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