18.03 wok int rences Mc Frank Weston, supervisor of the Freemont Corporation's Machining Department, was 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 Machine-hours Direct labor wages Supplies Maintenance Utilities Supervision Depreciation Total Actual Results: 42,000 $ 94,800 40,000 $ 91,600 27,200 23,700 22,300 59,000 103,000 $ 337,200 $ 326,800 30,300 26,200 23,900 Planning Budget 59,000 103,000 Variances $ 3,200 U 3,100 U 2,500 U 1,600 U $ 10,400 U "I 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 my department worked more efficiently last month than ever before. Instead, he tore me apart. I thought for a minute 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 $19,300; the fixed component of the budgeted utilities cost is $14,600. Required: 2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining department. Note: Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Freemont Corporation-Machining Department Flexible Budget Performance Report
18.03 wok int rences Mc Frank Weston, supervisor of the Freemont Corporation's Machining Department, was 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 Machine-hours Direct labor wages Supplies Maintenance Utilities Supervision Depreciation Total Actual Results: 42,000 $ 94,800 40,000 $ 91,600 27,200 23,700 22,300 59,000 103,000 $ 337,200 $ 326,800 30,300 26,200 23,900 Planning Budget 59,000 103,000 Variances $ 3,200 U 3,100 U 2,500 U 1,600 U $ 10,400 U "I 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 my department worked more efficiently last month than ever before. Instead, he tore me apart. I thought for a minute 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 $19,300; the fixed component of the budgeted utilities cost is $14,600. Required: 2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining department. Note: Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Freemont Corporation-Machining Department Flexible Budget Performance Report
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
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Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Transcribed Image Text:18:03
bok
int
rences
Mc
Frank Weston, supervisor of the Freemont Corporation's Machining Department, was 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
Machine-hours
Direct labor wages
Supplies
Maintenance
Utilities
Supervision.
Depreciation
Total
Actual
Results
42,000
$ 94,800
40,000
$ 91,600
27,200
23,700
22,300
59,000
103,000
$ 337,200 $326,800
30,300
26,200
Planning
Budget
23,900
59,000
103,000
Variances
$ 3,200 U
3,100 U
2,500 U
1,600 U
0
$10,400 U
"I 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 my department worked more efficiently last
month than ever before. Instead, he tore me apart. I thought for a minute 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 $19,300; the fixed component of the budgeted utilities cost is
$14,600.
Required:
2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining
department.
Note: Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for
unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.
Freemont Corporation Machining Department -
Flexible Budget Performance Report
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