Problem 9-23 (Algo) Critiquing a Cost Report; Preparing a Performance Report [LO9-1, LO9-2, LO9- 3, LO9-4] 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 wages Supplies Maintenance Utilities Supervision Depreciation Total Actual Results 42,000 $ 75,300 22,800 22,800 20,500 44,000 73,000 Planning Budget 40,000 $ 73,600 21,200 20,500 Variances $ 1,700 U 1,600 U 2,300 U 1,200 U 0 19,300 44,000 73,000 $ 258,400 $ 251,600 $ 6,800 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 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 $13,300; the fixed component of the budgeted utilities cost is $13,100.
Problem 9-23 (Algo) Critiquing a Cost Report; Preparing a Performance Report [LO9-1, LO9-2, LO9- 3, LO9-4] 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 wages Supplies Maintenance Utilities Supervision Depreciation Total Actual Results 42,000 $ 75,300 22,800 22,800 20,500 44,000 73,000 Planning Budget 40,000 $ 73,600 21,200 20,500 Variances $ 1,700 U 1,600 U 2,300 U 1,200 U 0 19,300 44,000 73,000 $ 258,400 $ 251,600 $ 6,800 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 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 $13,300; the fixed component of the budgeted utilities cost is $13,100.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 9-23 (Algo) Critiquing a Cost Report; Preparing a Performance Report [LO9-1, LO9-2, LO9-
3, LO9-4]
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
Planning
Budget
Machine-hours
Direct labor wages
Supplies
Maintenance
Utilities
Supervision
Depreciation
Total
Actual Results
42,000
$ 75,300
22,800
22,800
Machine-hours
Direct labor wages
Supplies
Maintenance
Utilities
Supervision
Depreciation
Total
21,200
20,500
19,300
44,000
73,000
$ 258,400 $ 251,600
40,000
$ 73,600
20,500
44,000
73,000
"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."
Actual
Results
$
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 $13,300; the fixed component of the budgeted utilities cost
is $13,100.
Variances
$ 1,700 U
1,600 U
2,300 U
1,200 U
Required:
2. Complete the performance report that will help Mr. Weston's superiors assess how well
costs were controlled in the machining department. (Round your intermediate
calculations to 2 decimal places. 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.)
42,000
75,300
22,800
22,800
20,500
44,000
73,000
$ 258,400
0
0
$6,800 U
Freemont Corporation-Machining Department
Flexible Budget Performance Report
For the Month Ended June 30
Flexible
Budget
Planning
Budget
40,000
73,600
$
21,200
20,500
19,300
44,000
73,000
$ 251,600](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15a526c6-de52-4025-8530-5e7aa950042d%2F88ea0dd1-cf8e-4f8f-ac76-b617a9682945%2Fmd9du3n_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 9-23 (Algo) Critiquing a Cost Report; Preparing a Performance Report [LO9-1, LO9-2, LO9-
3, LO9-4]
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
Planning
Budget
Machine-hours
Direct labor wages
Supplies
Maintenance
Utilities
Supervision
Depreciation
Total
Actual Results
42,000
$ 75,300
22,800
22,800
Machine-hours
Direct labor wages
Supplies
Maintenance
Utilities
Supervision
Depreciation
Total
21,200
20,500
19,300
44,000
73,000
$ 258,400 $ 251,600
40,000
$ 73,600
20,500
44,000
73,000
"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."
Actual
Results
$
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 $13,300; the fixed component of the budgeted utilities cost
is $13,100.
Variances
$ 1,700 U
1,600 U
2,300 U
1,200 U
Required:
2. Complete the performance report that will help Mr. Weston's superiors assess how well
costs were controlled in the machining department. (Round your intermediate
calculations to 2 decimal places. 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.)
42,000
75,300
22,800
22,800
20,500
44,000
73,000
$ 258,400
0
0
$6,800 U
Freemont Corporation-Machining Department
Flexible Budget Performance Report
For the Month Ended June 30
Flexible
Budget
Planning
Budget
40,000
73,600
$
21,200
20,500
19,300
44,000
73,000
$ 251,600
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