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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 reports for cost centers

 Partially completed budget performance reports for Garland Company, a manufacturer of light duty motors, follow:

Garland Company

Budget Performance Report—Vice President, Production

For the Month Ended November 30

Plant Actual Budget Over Budget Under Budget
Eastern Region $2,409,400 $2,420,000   $(10,600)
Central Region 2,998,400 3,000,000   (1,600)
Western Region (g) (h) (i)  
  (j) (k) $ (l) $(12,200)

 

Garland Company

Budget Performance Report—Manager. Western Region Plant

For the Month Ended November 30

Department Actual Budget Over Budget Under Budget
Chip Fabrication (a) (b) (c)  
Electronic Assembly $703,200 $700,000 $ 3,200  
Final Assembly 516,600 525,000   $(8,400)
  (d) (e) $ (f) $(8,400)

 

Garland Company

Budget Performance Report—Supervisor, Chip Fabrication

For the Month Ended November 30

Cost Actual Budget Over Budget Under Budget
Factory wages $ 95,500 $ 82,000 $13,500  
Materials 115,300 120,000   $(4,700)
Power and light 49,950 45,000 4,950  
Maintenance 37,200 28,000 9,200  
  $297,950 $275,000 $27,650 $(4,700)

 a.    Complete the budget performance reports by determining the correct amounts for the lettered spaces.

 b.    Compose a memo to Cassandra Reid, vice president of production for Garland Company, explaining the performance of the production division for November.

(a)

To determine

Budget: Budget 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 determine: The missing figures of budget performance reports of cost centers for Company G

Explanation

(a), (b)

W Region has three departments: chip fabrication, electronic assembly, and final assembly. The chip fabrication department budgetary report gives the total actual cost as (a) $297,950, and budget cost as (b) $275,000.

(c)

Determine the over budget for chip fabrication department.

Over (under) budget = Actual costs–Budget costs= $297,950–$275,000= $22,950

(d), (e), (f)

Determine the missing figures (d), (e), and (f).

Company G
Budget Performance Report–Manager, W Region Plant
For the Month Ended November 30
Department Actual Budget Over Budget Under Budget
Chip Fabrication (a) $297,950 (b) $275,000 (c) $22,950  
Electronic Assembly 703,200 700,000 3,200  
Final Assembly 516,600 525,000 $(8,400)
  (d) $1,517,750 (e) $1,500,000 (f) $26,150 $(8,400)

Table (1)

(g), (h)

Production Line of Company G has three regions: E Region Plant, C Region Plant, and W Region Plant

(b)

To determine

To draft: A memo to CR, Vice President of Company G, explaining the performance of the production division

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