GEN COMBO LL MANAGERIAL ACCOUNTING; CONNECT ACCESS CARD
16th Edition
ISBN: 9781260088458
Author: Ray H Garrison
Publisher: McGraw-Hill Education
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Chapter 9, Problem 26P
PROBLEM 9-26 Critiquing a Cost Report; Preparing a Performance Report LO9-1, LO9-2, LO9-3, LO9-4, LO9-6
Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly upset after being reprimanded for his department's poor performance over the prior month. The department's cost control report is given below:
| Freemont Corporation-Machining Department Cost Control Report For the Month Ended June 30 |
|||
| Actual Results |
Planning Budget |
Variances | |
| Machine-hours | 38,000 |
35,000 | |
| Direct labor wages | $86,100 |
$ 80,500 | $5,600 U |
| Supplies | 23,100 |
21,000 | 2,100 U |
| Maintenance | 137,300 |
134,000 | 3,300 U |
| Utilities | 15,700 |
15,200 | 500 U |
| Supervision | 38,000 |
38,000 | 0 |
80.000 |
80.000 | 0 | |
| Total | $380,200 |
$368,700 | $11,500 U |
1 just can’t understand all of these unfavorable variances.” Weston complained to the supervisor of another department. “When the boss called me in,I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that it might be over the supplies that were stolen out of our warehouse last month. But they only amounted to a couple of hundred dollars, and just look at this report. Everything is unfavorable.”
Direct labor wages and supplies are variable costs: supervision and depreciation are fixed costs: and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $92,000: the fixed component of the budgeted utilities cost is $ 11.700.
Required:
- Evaluate the company's cost control report and explain why the variances were all unfavorable.
- Using Exhibit 9-8 as your guide, prepare a performance report that will help Mr. Weston’s superiors assess how well costs were controlled in the Machining Department.
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Chapter 9 Solutions
GEN COMBO LL MANAGERIAL ACCOUNTING; CONNECT ACCESS CARD
Ch. 9 - Prob. 1QCh. 9 - What is a flexible budget and how does it differ...Ch. 9 - Prob. 3QCh. 9 - Why is it difficult to interpret a difference...Ch. 9 - What is an activity variance and what does it...Ch. 9 - What is a revenue variance and what does it mean?Ch. 9 - 9-7 What is a spending variance and what does it...Ch. 9 - 9-8 What does a flexible budget performance report...Ch. 9 - How does a flexible budget based on two cost...Ch. 9 - 9-10 What assumption is implicitly made about cost...
Ch. 9 - 9-11 What assumption is implicitly made about cost...Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - The Excel worksheet form that appears below is to...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 2F15Ch. 9 - Prob. 3F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Adger Corporation is a service company that...Ch. 9 -
L09-1, LO9-2, LO9-3
Adger Corporation is a...Ch. 9 - Prob. 8F15Ch. 9 - Adger Corporation is a service company that...Ch. 9 - Prob. 10F15Ch. 9 - Prob. 11F15Ch. 9 - Prob. 12F15Ch. 9 - Prob. 13F15Ch. 9 - Prob. 14F15Ch. 9 - Prob. 15F15Ch. 9 - Prob. 1ECh. 9 - Prob. 2ECh. 9 -
EXERCISE 9-3 Revenue and Spending Variances...Ch. 9 - Prob. 4ECh. 9 - Prob. 5ECh. 9 - EXERCISE 9-6 Critique a Variance ReportLO9-6 The...Ch. 9 - Prob. 7ECh. 9 - EXERCISE 9-8 Flexible Budgets and Activity...Ch. 9 - Fixed Cost...Ch. 9 - ...Ch. 9 -
EXERCISE 9-11 Flexible Budget L09-1
Refer to the...Ch. 9 - EXERCISE 9-12 Activity Variances LO9-2
Refer to...Ch. 9 - ...Ch. 9 -
EXERCISE 9-14 Prepare a Flexible Budget...Ch. 9 - Prob. 15ECh. 9 -
EXERCISE 9-16 Flexible Budgets and Revenue and...Ch. 9 - EXERCISE 9-17 Flexible Budget Performance Report...Ch. 9 - Prob. 18ECh. 9 - PROBLEM 919: Flexible Budget Performance Reports;...Ch. 9 -
PROBLEM 9-20 Activity and Spending Variances...Ch. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 -
PROBLEM 9-24 Critiquing a Report; Preparing a...Ch. 9 -
PROBLEM 9-25 Critiquing a Variance Report;...Ch. 9 - PROBLEM 9-26 Critiquing a Cost Report; Preparing a...Ch. 9 - Prob. 27CCh. 9 - ...Ch. 9 - Prob. 29C
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