|
Several years ago, Shipley Corporation developed a comprehensive budgeting system for profit planning and control purposes. While departmental supervisors have been happy with the system, the factory manager has expressed considerable dissatisfaction with the information being generated by the system.
|
| A typical departmental cost report for a recent period follows: |
Assembly Department
Cost Report
For the Month Ended March 31 |
|
Planning
Budget |
Actual
Results |
Variances |
| Machine-hours |
|
20,000 |
|
15,000 |
|
|
|
| Variable costs: |
|
|
|
|
|
|
|
| Supplies |
$ |
11,700 |
$ |
11,100 |
$ |
600 |
F |
| Scrap |
|
43,500 |
|
40,600 |
|
2,900 |
F |
| Indirect materials |
|
138,000 |
|
115,400 |
|
22,600 |
F |
| Fixed costs: |
|
|
|
|
|
|
|
| Wages and salaries |
|
79,000 |
|
84,700 |
|
5,700 |
U |
| Equipment depreciation |
|
109,000 |
|
109,000 |
|
- |
|
|
|
|
|
|
|
|
|
| Total cost |
$ |
381,200 |
$ |
360,800 |
$ |
20,400 |
F
|
Complete the new performance report for the quarter, based on Flexible Budget Performance approach.