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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 Actpal Results 38,000 $ 80,100 23,100 137,300 15,700 Planning Budget 35,000 $ 80,500 21,000 134,000 15,200 38,000 80,000 38,000 80,000 $ 300,200 $368,700 Variances. $ 5,600 U 2,100 u 3,300 U 500 U $ 11,500 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 $92,000; the fixed component of the budgeted utilities cost is $11,700 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 (.e., zero variance). Input all amounts as positive values.

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 Actpal Results 38,000 $ 80,100 23,100 137,300 15,700 Planning Budget 35,000 $ 80,500 21,000 134,000 15,200 38,000 80,000 38,000 80,000 $ 300,200 $368,700 Variances. $ 5,600 U 2,100 u 3,300 U 500 U $ 11,500 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 $92,000; the fixed component of the budgeted utilities cost is $11,700 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 (.e., zero variance). Input all amounts as positive values.

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter10: Evaluating Decentralized Operations
Section: Chapter Questions
Problem 1PB
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Machine-hours Direct labor wages Supplies Maintenance Utilities Supervision Depreciation Total Actual Results Freemont Corporation Machining Department Flexible Budget Performance Report For the Month Ended June 30 38,000 $ 86,100 23,100 137,300 15,700 38,000 80,000 $ 380,2001 Revenue and Spending Variances Flexible Budget Activity Variances Planning Budget 35,000 80,500 21,000 134,000 15,200 38,000 80,000 $368,700 $
Transcribed Image Text:Machine-hours Direct labor wages Supplies Maintenance Utilities Supervision Depreciation Total Actual Results Freemont Corporation Machining Department Flexible Budget Performance Report For the Month Ended June 30 38,000 $ 86,100 23,100 137,300 15,700 38,000 80,000 $ 380,2001 Revenue and Spending Variances Flexible Budget Activity Variances Planning Budget 35,000 80,500 21,000 134,000 15,200 38,000 80,000 $368,700 $
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 Actpal Results 38,000 $ 86,100 23,100 137,300 15,700 Planning Budget 35,000 $ 80,500 21,000 134,000 15,200 38,000 80,000 38,000 00,000 $ 380,200 $368,700 Variances $ 5,600 U 2,100 u 3,300 U 500 U 0 $11,500 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 $92,000; the fixed component of the budgeted utilities cost is $11,700. 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.
Transcribed Image Text: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 Actpal Results 38,000 $ 86,100 23,100 137,300 15,700 Planning Budget 35,000 $ 80,500 21,000 134,000 15,200 38,000 80,000 38,000 00,000 $ 380,200 $368,700 Variances $ 5,600 U 2,100 u 3,300 U 500 U 0 $11,500 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 $92,000; the fixed component of the budgeted utilities cost is $11,700. 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.
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