Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president. In January 2020, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below. Manufacturing Overhead Actual Budget Individual costs—Cutting Department—Seattle Indirect labor $73,100 $69,600 Indirect materials 48,200 45,700 Maintenance 21,000 17,700 Utilities 20,600 16,600 Supervision 22,400 19,900 $185,300 $169,500 Total costs Shaping Department—Seattle $157,500 $149,000 Finishing Department—Seattle 211,900 204,500 Denver division 677,900 673,400 San Diego division 722,500 714,500 Additional overhead costs were incurred as follows: Seattle division production manager—actual costs $52,000, budget $51,400; vice president of production—actual costs $65,500, budget $64,000; president—actual costs $76,000, budget $74,200. These expenses are not allocated. The vice presidents who report to the president, other than the vice president of production, had the following expenses. Vice President Actual Budget Marketing $134,000 $129,800 Finance 108,600 105,100 Prepare the Manufacturing overhead—Seattle division manager responsibility report.

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president.

In January 2020, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below.

Manufacturing Overhead	Actual	Budget
Individual costs—Cutting Department—Seattle
Indirect labor	$73,100	$69,600
Indirect materials	48,200	45,700
Maintenance	21,000	17,700
Utilities	20,600	16,600
Supervision	22,400	19,900
	$185,300	$169,500

Total costs
Shaping Department—Seattle	$157,500	$149,000
Finishing Department—Seattle	211,900	204,500
Denver division	677,900	673,400
San Diego division	722,500	714,500

Additional overhead costs were incurred as follows: Seattle division production manager—actual costs $52,000, budget $51,400; vice president of production—actual costs $65,500, budget $64,000; president—actual costs $76,000, budget $74,200. These expenses are not allocated.

The vice presidents who report to the president, other than the vice president of production, had the following expenses.

Vice President	Actual	Budget
Marketing	$134,000	$129,800
Finance	108,600	105,100

Prepare the Manufacturing overhead—Seattle division manager responsibility report.

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