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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
$
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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