Martinez Company’s organization chart includes the president; the vice president of production; three assembly plants—Dallas, Atlanta, and Tucson; and two departments within each plant—Machining and Finishing. Budget and actual manufacturing cost data for July 2017 are as follows. Finishing Department—Dallas: direct materials $44,680 actual, $45,200 budget; direct labor $84,290 actual, $81,470 budget; manufacturing overhead $51,440 actual, $52,000 budget. Machining Department—Dallas: total manufacturing costs $221,000 actual, $216,000 budget. Atlanta Plant: total manufacturing costs $423,230 actual, $424,070 budget. Tucson Plant: total manufacturing costs $493,840 actual, $497,040 budget. The Dallas plant manager’s office costs were $96,160 actual and $92,550 budget. The vice president of production’s office costs were $134,420 actual and $131,450 budget. Office costs are not allocated to departments and plants. 1. Prepare the reports in a responsibility system for: The vice president of production. To Vice President—Production Month: July Controllable Costs: Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable V P Production $ $ $ UnfavorableFavorableNeither Favorable nor Unfavorable Assembly plants: AtlantaDallasFinishingMachiningTucson Neither Favorable nor UnfavorableFavorableUnfavorable AtlantaDallasFinishingMachiningTucson UnfavorableNeither Favorable nor UnfavorableFavorable AtlantaDallasFinishingMachiningTucson FavorableUnfavorableNeither Favorable nor Unfavorable Total $ $ $ UnfavorableFavorableNeither Favorable nor Unfavorable

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 7

Martinez Company’s organization chart includes the president; the vice president of production; three assembly plants—Dallas, Atlanta, and Tucson; and two departments within each plant—Machining and Finishing. Budget and actual manufacturing cost data for July 2017 are as follows.

Finishing Department—Dallas: direct materials $44,680 actual, $45,200 budget; direct labor $84,290 actual, $81,470 budget; manufacturing overhead $51,440 actual, $52,000 budget.

Machining Department—Dallas: total manufacturing costs $221,000 actual, $216,000 budget.

Atlanta Plant: total manufacturing costs $423,230 actual, $424,070 budget.

Tucson Plant: total manufacturing costs $493,840 actual, $497,040 budget.

The Dallas plant manager’s office costs were $96,160 actual and $92,550 budget. The vice president of production’s office costs were $134,420 actual and $131,450 budget. Office costs are not allocated to departments and plants.

1. Prepare the reports in a responsibility system for: The vice president of production.

To Vice President—Production				Month: July
Controllable Costs:	Budget	Actual	Favorable Unfavorable Neither Favorable nor Unfavorable
V P Production	$	$	$	UnfavorableFavorableNeither Favorable nor Unfavorable
Assembly plants:
AtlantaDallasFinishingMachiningTucson				Neither Favorable nor UnfavorableFavorableUnfavorable
AtlantaDallasFinishingMachiningTucson				UnfavorableNeither Favorable nor UnfavorableFavorable
AtlantaDallasFinishingMachiningTucson				FavorableUnfavorableNeither Favorable nor Unfavorable
Total	$	$	$	UnfavorableFavorableNeither Favorable nor Unfavorable

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