Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly 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 vages Supplies Maintenance Utilities Supervision Depreciation Total Actual Results 42,000 $ 93,500 29,900 25,900 23,600 50,000 101,000 Planning Budget 40,000 $ 90,400 Variances $ 3,100 U 3,000 U 2,600 U 1,500 U 26,800 23,300 22,100 58,000 101,000 $ 331,000 $ 321,600 $ 10,200 U 0 0 "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 for a fact that my department worked more efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that 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 $18,900; the fixed component of the budgeted utilities cost is $14,500 Required: 2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining department. (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.)
Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly 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 vages Supplies Maintenance Utilities Supervision Depreciation Total Actual Results 42,000 $ 93,500 29,900 25,900 23,600 50,000 101,000 Planning Budget 40,000 $ 90,400 Variances $ 3,100 U 3,000 U 2,600 U 1,500 U 26,800 23,300 22,100 58,000 101,000 $ 331,000 $ 321,600 $ 10,200 U 0 0 "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 for a fact that my department worked more efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that 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 $18,900; the fixed component of the budgeted utilities cost is $14,500 Required: 2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining department. (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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question
D1.
Transcribed Image Text: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 $18,900; the fixed component of the budgeted utilities cost is
$14,500.
Required:
2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining
department. (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.)
Machine-hours
Direct labor wages
Supples
Maintenance
Utilities
Supervision
Depreciation
Total
Actual
Results
Freemont Corporation-Machining Department
Flexible Budget Performance Report
For the Month Ended June 30
Flexible
Budget
42,000
$ 93,500
29,800
25,900
23,600
58,000
101,000
$ 331,800
$
Planning
Budget
40,000
$ 90,400
26,800
23,300
22,100
58,000
101,000
$ 321,600
Transcribed Image Text:Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly 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 vages
Supplies
Maintenance
Utilities
Supervision
Depreciation
Actual
Results
42,000
$ 93,500
29,800
25,900
23,600
58,000
101,000
$ 331,000
Planning
Budget
40,000
$ 90,400
26,800
23,300
22,100
58,000
101,000
$321,600
Variances
$ 3,100 U
3,000 U
2,600 U
1,500 U
0
0
$ 10,200 U
Total
"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 for a fact that my department worked more
efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that 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 $18,900; the fixed component of the budgeted utilities cost is
$14,500.
Required:
2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining
department. (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.)
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