Scotland Beauty Products (SBP) manufactures face cream, body lotion, and liquid soap in a joint manufacturing process in one manufacturing facility. SBP has three general managers with each one in charge of a separate product line. Michelle Tallerico oversees the face cream line, Becky Borger oversees the body lotion line, and Lorie Osho oversees the liquid soap line. Consider the following performance report for the three general managers and their product lines, where each line is assigned direct costs and allocated support costs and joint costs. Michelle Tallerico Face Cream Becky Borger Body Lotion Lorie Osho Liquid Soap Actual Target Over (Under) Target Actual Target Over (Under) Target Actual Target Over (Under) Target Direct materials $104,567 $107,000 $(2,433) $178,748 $175,000 $3,748 $146,792 $150,000 $(3,208) Direct labor 238,102 225,000 13,102 280,928 250,000 30,928 234,857 244,000 (9,143) Allocated support costs 598,342 600,000 (1,658) 598,090 625,000 (26,910) 605,342 600,000 5,342 Allocated joint costs 23,498 25,000 (1,502) 27,948 30,000 (2,052) 25,873 20,000 5,873 Total production costs $964,509 $957,000 $7,509 $1,085,714 $1,080,000 $5,714 $1,012,864 $1,014,000 $(1,136) Using the performance report for Scotland Beauty Products (including support department and joint cost allocations), evaluate the performance of the three production managers, specifically ranking them based on total costs, with 1 being the best at controlling costs and 3 being the worst. Rank Michelle Tallerico and Face Cream Becky Borger and Body Lotion Lorie Osho and Liquid Soap

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Scotland Beauty Products (SBP) manufactures face cream, body lotion, and liquid soap in a joint manufacturing process in one manufacturing facility. SBP has three general managers with each one in charge of a separate product line. Michelle Tallerico oversees the face cream line, Becky Borger oversees the body lotion line, and Lorie Osho oversees the liquid soap line. Consider the following performance report for the three general managers and their product lines, where each line is assigned direct costs and allocated support costs and joint costs.

	Michelle Tallerico Face Cream	Becky Borger Body Lotion	Lorie Osho Liquid Soap
	Actual	Target	Over (Under) Target	Actual	Target	Over (Under) Target	Actual	Target	Over (Under) Target
Direct materials	$104,567	$107,000	$(2,433)	$178,748	$175,000	$3,748	$146,792	$150,000	$(3,208)
Direct labor	238,102	225,000	13,102	280,928	250,000	30,928	234,857	244,000	(9,143)
Allocated support costs	598,342	600,000	(1,658)	598,090	625,000	(26,910)	605,342	600,000	5,342
Allocated joint costs	23,498	25,000	(1,502)	27,948	30,000	(2,052)	25,873	20,000	5,873
Total production costs	$964,509	$957,000	$7,509	$1,085,714	$1,080,000	$5,714	$1,012,864	$1,014,000	$(1,136)

Using the performance report for Scotland Beauty Products (including support department and joint cost allocations), evaluate the performance of the three production managers, specifically ranking them based on total costs, with 1 being the best at controlling costs and 3 being the worst.

		Rank
Michelle Tallerico and Face Cream
Becky Borger and Body Lotion
Lorie Osho and Liquid Soap

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Michelle Tallerico and Face Cream	3
Becky Borger and Body Lotion	2
Lorie Osho and Liquid Soap	1

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