Ron Kanobi, Director Of Operations, was upset because their group was not receiving their bonus due to the performance report provided below by the Senior Management Team. They explained to a colleague, "I know that my department has worked more efficiently than it has ever worked before and completed more units. I thought it might be over the supplies that have increased due to work at home needs but that is only a sm amount of the overall budget. Everything is unfavourable, and I don't even know why." The Star Worlds Company Performance Report-Operations Department Actual Budget Variance Units 34,000 30,000 Variable overhead costs: Tech support Indirect labour Supplies Maintenance Total variable overhead cost Fixed overhead cost: Supervision LT. Maintenance Depreciation Total fixed overhead cost 20,750 18,000 2,750 U 80,200 72,000 8,200 U 34,500 27,000 7,500 U 43.000 178,450 39,000 4,000 U 156,000 22,450 U 53,000 53,000 93,900 93,600 300 U 36,400 36400 183.000 183.300 300 U Total Overhead Cost 361,750 339,000 22,750 U The Operations Department had a budgeted activity level of 30,000 units. Actual production for the month was 34,000 units.
Ron Kanobi, Director Of Operations, was upset because their group was not receiving their bonus due to the performance report provided below by the Senior Management Team. They explained to a colleague, "I know that my department has worked more efficiently than it has ever worked before and completed more units. I thought it might be over the supplies that have increased due to work at home needs but that is only a sm amount of the overall budget. Everything is unfavourable, and I don't even know why." The Star Worlds Company Performance Report-Operations Department Actual Budget Variance Units 34,000 30,000 Variable overhead costs: Tech support Indirect labour Supplies Maintenance Total variable overhead cost Fixed overhead cost: Supervision LT. Maintenance Depreciation Total fixed overhead cost 20,750 18,000 2,750 U 80,200 72,000 8,200 U 34,500 27,000 7,500 U 43.000 178,450 39,000 4,000 U 156,000 22,450 U 53,000 53,000 93,900 93,600 300 U 36,400 36400 183.000 183.300 300 U Total Overhead Cost 361,750 339,000 22,750 U The Operations Department had a budgeted activity level of 30,000 units. Actual production for the month was 34,000 units.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Kindly answer the two questions
Transcribed Image Text:Ron Kanobi, Director Of Operations, was upset because their group was not receiving their bonus due to the performance report
provided below by the Senior Management Team.
They explained to a colleague, "I know that my department has worked more efficiently than it has ever worked before and
completed more units. I thought it might be over the supplies that have increased due to work at home needs but that is only a sm
amount of the overall budget. Everything is unfavourable, and I don't even know why."
The Star Worlds Company
Performance Report-Operations Department
Actual
Budget
Variance
Units
34,000
30,000
Variable overhead costs:
Tech support
Indirect labour
Supplies
Maintenance
20,750
18,000
2,750 U
80,200
72,000
8,200 U
34,500
27,000
7,500 U
43,000
39,000
4,000 U
Total variable overhead cost
178,450
156,000
22,450 U
Fixed overhead cost:
Supervision
.T. Maintenance
Depreciation
Total fixed overhead cost
53,000
53,000
93,900
36,400
93,600
300 이
36.400
183,300
183.000
300 U
Total Overhead Cost
361,750
339,000
22,750| 이
The Operations Department had a budgeted activity level of 30,000 units. Actual production for the month was 34,000 units.
Transcribed Image Text:1. Prepare a new overhead performance report that will help Ron Kanobi assess efficiency and cost control in the Operations
department.
2. Do you think that the Director and the Department deserve a bonus? Explain your answer.
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