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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

 The Eastern District of Adelson Inc. is organized as a cost center. The budget for the Eastern District of Adelson Inc. for the month ended December 31 is as follows (in thousands):

Sales salaries $819,840
System administration salaries 448,152
Customer service salaries 152,600
Billing salaries 98,760
Maintenance 271,104
Depreciation of plant and equipment 92,232
Insurance and property taxes 41,280
Total $1,923,968

 During December, the costs incurred in the Eastern District were as follows:

Sales salaries $ 818,880
System administration salaries 447,720
Customer service salaries 183,120
Billing salaries 98,100
Maintenance 273,000
Depreciation of plant and equipment 92,232
Insurance and property taxes 41,400
Total $1,954,452

 Instructions

  1. 1. Prepare a budget performance report for the manager of the Eastern District of Adelson for the month of December.
  2. 2. For which costs might the supervisor 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 manager of E District, for the month of December

Explanation

Prepare budget performance report for the manager of E District, for the month of December.

Incorporation A
Budget Performance Report-Manager, E District
For the Month Ended December 31
  Actual ($) Budget ($) Over Budget ($) Under Budget ($)
Sales salaries $818,880 $819,840   $(960)
System administration salaries 447,720 448,152   (432)
Customer service salaries 183,120 152,600 $30,520  

(2)

To determine

To indicate: The costs which the supervisor requires supplemental reports

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