A report for the company's Assembly Department for the month of March follows: Assembly Department Cost Report For the Month Ended March 31 Planning Budget 30,000 Actual Results Variances Machine-hours 25,000 Variable costs: Supplies Scrap Indirect materials Fixed costs: $ 7,500 $ 23,800 72,200 8,100 $ 25,500 84,000 600 F 1,700 F 11,800 F Wages and salaries Equipment depreciation 70,300 97,000 67,000 3,300 U 0 לח Total cost $270,800 $281,600 $10,800 F After receiving a copy of this cost report, the supervisor of the Assembly Department stated, “These reports are super. It makes me feel really good to see how well things are going in my department. I can't understand why those people upstairs complain so much about the reports." For the last several years, the company's marketing department has chronically failed to meet the sales goals expressed in the company's monthly budgets. Required: 1. The company's president is uneasy about the cost reports, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. 4. Were costs well controlled in March?
A report for the company's Assembly Department for the month of March follows: Assembly Department Cost Report For the Month Ended March 31 Planning Budget 30,000 Actual Results Variances Machine-hours 25,000 Variable costs: Supplies Scrap Indirect materials Fixed costs: $ 7,500 $ 23,800 72,200 8,100 $ 25,500 84,000 600 F 1,700 F 11,800 F Wages and salaries Equipment depreciation 70,300 97,000 67,000 3,300 U 0 לח Total cost $270,800 $281,600 $10,800 F After receiving a copy of this cost report, the supervisor of the Assembly Department stated, “These reports are super. It makes me feel really good to see how well things are going in my department. I can't understand why those people upstairs complain so much about the reports." For the last several years, the company's marketing department has chronically failed to meet the sales goals expressed in the company's monthly budgets. Required: 1. The company's president is uneasy about the cost reports, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. 4. Were costs well controlled in March?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
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.
ABC Costing
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:A report for the company's Assembly Department for the month of March follows:
Assembly Department
Cost Report
For the Month Ended March 31
Actual
Planning
Budget
30,000
Results
Variances
Machine-hours
25,000
Variable costs:
Supplies
Scrap
Indirect materials
$
7,500 $
23,800
72,200
8,100
25,500
84,000
$
600 F
1,700 F
11,800 F
Fixed costs:
Wages and salaries
Equipment depreciation
67,000
97,000
70,300
3,300 U
97,000
Total cost
$270,800 $281,600 $10, 800 F
After receiving a copy of this cost report, the supervisor of the Assembly Department stated, "These reports are super. It makes me
feel really good to see how well things are going in my department. I can't understand why those people upstairs complain so much
about the reports."
For the last several years, the company's marketing department has chronically failed to meet the sales goals expressed in the
company's monthly budgets.
Required:
1. The company's president is uneasy about the cost reports, identify at least two reasons.
2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs?
3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach.
4. Were costs well controlled in March?
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